Japan and the World Economy最新文献

Using the lens of a medium scale DSGE model, we analyze macroeconomic effects of Japan’s unconventional monetary policy which is known as Qualitative and Quantitative Easing (QQE). Our focus is on the bond market. The model features: (i) commercial bank’s demand for excess reserve in response to liquidity risk and (ii) linkage among central bank, commercial banks and the government via government bonds and bank reserve. We simulate the policy effects of a quantitative easing (QE) shock and a negative shock to the interest rate on excess reserve (IOER). The QE multiplier for real GDP is 1.94 and it has substantial effect on lowering the bond yield in line with the policy target of QQE. On the other hand, an IOER cut has qualitatively similar effects on the real and financial sectors but quantitatively its effect is of second order importance. In light of these policy simulations, we evaluate Japan’s recent yield curve control policy.

In macroeconomics, the effectiveness of fiscal policy is an old, but new controversial question that has been debated for many years. The controversy naturally arises if analytical frameworks, sample periods, or targeted countries are different. However, it sometimes arises, even when using similar analytical frameworks and sample periods. The purpose of this study is to explore whether revisions to the GDP data series are a source of the controversy in Japan. Since the mid-1990s, the Japanese economy has remained stuck in a liquidity trap where interest rates have fallen to zero. However, not only has the cumulative fiscal deficit increased to an unprecedented level, but many structural problems have also emerged. Under these circumstances, it is unclear whether the fiscal policy has worked effectively in the Japanese economy. When a reduced-form equation or VAR model was estimated, the empirical findings were quite different depending on GDP benchmark year we used in the analysis. When benchmark year 2011 was used, fiscal expenditure was effective under ultralow interest rates. In contrast, when benchmark year 2015 was used, it was not effective, especially since around 2010, even under ultra-low interest rates. This implies that in Japan, the effectiveness of fiscal policy must be carefully interpreted, noting which GDP benchmark year is used in the analysis.

We consider conglomerate mergers using the Google/Fitbit case as an example. First, summarizing the importance of conglomerate merger control and the current enforcement standards for such mergers by competition laws, we briefly describe a review of the Google/Fitbit merger by the Japan Fair Trade Commission. Next, we explain the background of the merger and introduce Chen et al. (2022), who theoretically discuss a cross-market merger by considering the Google/Fitbit merger. Finally, we discuss the implications of Chen et al. (2022) for controlling conglomerate mergers. Specifically, personalized pricing based on data analytics can be a foreclosure device; in particular, merger-specific efficiencies can foster market foreclosure.

Antitrust investigations in the mobile app economy often require a definition of the relevant market of mobile apps and the evaluation of their market power. However, existing antitrust tools face significant challenges due to the non-price nature of mobile apps with multiple revenue sources, two competition margins at the mobile OS and mobile app levels, and the switching costs involved in the choice of mobile OSs. In this paper, we provide a description of the mobile app economy, including its essential components, players, and characteristics, and identify the challenges currently observed in antitrust investigations. We propose a model for mobile app users and advertisers that can address these issues and suggest a method for defining the relevant market of mobile apps and evaluating their market power, which is adaptable to markets with zero-priced products or multiple revenue sources beyond mobile apps.

This study analyzes the state-dependent effect of the Bank of Japan (BoJ)’s intervention in stock markets from 2013 to 2017. A causal inference on such intervention is difficult because of the self-selective behavior of central banks. To address this problem, I apply the propensity score method in a time series context, exploiting stock price information of a single day. The key finding is that the effects are state-dependent and stronger during market downturns.

This paper examines the response of Japanese regional banks to the quantitative easing operations conducted by the Bank of Japan (BOJ) using semiannual bank-level data from 2001 to 2020. Many regional banks predominantly focus on lending business in their local areas so that, unlike some previous literature, we control for the local economic conditions. We found that, compared with the pre-QQE period, the BOJ’s government bond purchase has a remarkably greater impact on regional bank’s lending after the introduction of QQE. These results suggest that the QQE policy is quite effective in promoting bank lending. Regarding the differences in bank characteristics, the magnitude of impact is larger for regional banks with a higher NPL ratio, a larger asset size, and a lower market share. The first result is consistent with the findings of Bowman et al. (2015) and Matousek et al. (2019), whereas the second and third results are novel. The Granger causality tests produce consistent results.

Measuring the labor share is not an easy task. Labor share movements often vary depending on both their definition and the measurement scope. This study estimates the labor share in Japan based on two representative government statistical sources—the National Accounts and the “Financial Statements Statistics of Corporations by Industry” —with their differences in coverage and accounting standards corrected. We confirmed a clear downward trend in Japan’s labor share since the 1990 s, both in the total Japanese economy and in the corporate sector. The driving force behind the labor share decline is the significant decrease in the income of the self-employed (mixed income) and in the salaries and bonuses awarded to executives who are owners of small- and medium-sized enterprises (SMEs). This decrease is attributed to the decline in the number of self-employed individuals and SMEs. By contrast, salaries and bonuses to employees hardly contributed to the decline. These findings suggest that the straightforward narrative that—technological progress, globalization such as the transfer of production overseas, and the expansion of non-regular employment have reduced labor income to employees, thus resulting in a lower labor share—does not directly apply to the Japanese economy. Understanding the mechanism of the decline in Japan’s labor share requires identifying the causes and effects of the decline in the numbers of self-employed individuals and SMEs.

I revisit the excess volatility of the consumption puzzle, a feature often observed in developing and emerging economies. I assess how the excess volatility of consumption varies across countries by incorporating interrelation between countries’ commodity dependence and income level. This is estimated in the context of the excess sensitivity of the consumption to output using cross-country panel data. I find that the sensitivity of consumption on the income level appears differently by the country’s commodity dependence. The sensitivity is higher in low-income groups for the commodity-dependent countries, whereas the opposite pattern is observed for non-commodity-dependent countries.

This study explores the role of storage systems in reducing the variability of renewable power, focusing on pumped hydropower storage (PHS) systems. We regress the hourly storage by PHS on the hourly solar power generation to estimate the average amount of solar power generation stored by PHS systems. We adopt an instrumental variable approach to mitigate any endogeneity concerns, in which a weighted sunshine duration serves as the instrument for solar power generation. Our estimation results show that PHS systems alleviate the intermittency of solar power generation: an additional 1 MWh of solar power generation corresponds to an additional 0.249 MWh of storage by PHS systems. The relationship between PHS and solar power is more pronounced when the demand is relatively low and solar power generation is large. Inter-regional transmission grids also respond to an increase in solar power generation but to a lesser extent than PHS systems. Based on the estimated coefficients in the empirical analysis, we quantified the value of the existing PHS systems as storage systems that mitigated intermittent solar power generation. The estimated social benefit of avoiding curtailment is 180–280 million yen for a 10 MW scale plant, accounting for 7.7–11.7% of the cost of constructing a new PHS system. The result highlights the importance of effectively utilizing the current PHS capacity.

Feed-in tariff (FIT) is an important worldwide initiative to encourage renewable electricity technologies. Under the Japanese FIT system, households with solar panels decide the amount of both self-consumption and sales to the power company. By analyzing the household self-consumption and sales behaviors of solar-generated electricity obtained from the Ministry of the Environment of Japan, we examine (1) whether the rate of increase in electricity sales by households is higher or lower than the rate of increase in solar power generation and (2) whether self-consumption and sales behaviors of solar-generated electricity differ among households with different sales prices. The results show that the rate of increase in electricity sales is lower than that in solar electricity generation. This suggests that households increase their self-consumption as solar power generation increases. However, as the rate of increase in self-consumption is relatively low, solar-generated electricity is considered as a necessary good. Furthermore, we find that higher sales prices induce households to reduce their self-consumption and increase solar electricity sales to power companies.