Kazumi Asako

Economic growth and environmental pollution under the max-min principle

Abstract This paper first analyzes the interactions between capital accumulation and environmental pollution under the program of sustained constant utility, which depends on per capita consumption and pollution, over all generations. Then the optimal program of economic growth is discussed. The implications of the constant-utility criterion (or the max-min principle) are compared with those of the utilitarian criterion which has been widely adopted in environmental pollution literature. Subsequently, the analysis incorporates pollution-abatement investment and exhaustible resources. We conclude that the max-min principle works fairly satisfactorily in this world.

The rise and fall of deficit in Japan, 1965-1990

Abstract This paper investigates the fifteen-year period when the Japanese government deficit (defined as the deficit bond issues to the general budget) rose sharply and shrank to zero. Our main contribution is to differentiate the budget “plan” and the “actual” (ex post) budget in order to distinguish intention and surprise. From 1976 to 1979, deficit bonds were considered to be deliberately increased, because of little surprise (deviations of actual from planned budget) in deficits for these years. The deficit ratio was brought down in the 1980s, mainly by freezing expenditures at the nominal level and waiting for bracket creeps in taxes to catch up. Beyond a trend increase in the 1970s and a trend decrease in the 1980s, the Japanese government acted to pursue a fiscal expenditure fine-tuning.

Government consumption and fiscal policy: some evidence from Japan

Japanese data from 1971 and 1995 are used to estimate the marginal rate of substitution between private consumption and government consumption, and to empirically analyse the validity of the Ricardian equivalence theorem. The marginal rate of substitution between government expenditure and private consumption is found to be higher in Japan than in studies using US data. In other words, these two types of consumption are closer substitutes in Japan than in the US. The data negate the Ricardian equivalence theorem. However, it should be noted that the perceived wealth effect is small and has a value between 0.0087 and 0.019.

Rational expectations and the effectiveness of monetary policy with special reference to the Barro-Fischer model

Abstract Monetary policy is sometimes alleged to be ineffective when the rational-expectations hypothesis is imposed on macroeconomic models. Barro and Fischer (1976) once presented in this journal a simple macroeconomic model in order to explain such a claim. However, their conclusion depends on a specific rule employed for the future course of money supply. It is shown that their model embodies an important factor which generally renders monetary policies effective, rational expectations notwithstanding. It is suggested that this property also holds in more general macroeconomic frameworks.

Transfiguration of the foreign exchange market since the Euro introduction

We confirm that there are changes in the features of the foreign exchange market since the Euro introduction through empirical experiments on five major exchange rate series in the world. We verify the existence of asymmetry in volatility process of Japanese Yen (JPY)/United States Dollar (USD), Australian Dollar (AUD)/USD and New Zealand Dollar (NZD)/USD while JPY appreciates and AUD and NZD depreciate. We also ascertain that volatility for those five major exchange rate series has become larger and the correlation between exchange rate series has become stronger since the Euro introduction.