Shinichi Ichimura

Econometric modeling of China

A model study of balance of payments and money supply of China ICSEADs econometric model of the Chinese economy outline of the PAIR China-Hong Kong link model Chinas econometric model for Project PAIR a computable general equilibrium model for the Chinese economy natural decomposition of total factor productivity growth Chinas macro econometric annual model a retrospective view of the Asian financial crisis - special reference to exchange rate policy output and price determination in Chinese macroeconomic models a note on the statistical data of China - population and labour.

The Political Economy of Policy-Making

This chapter purports to offer a conceptual framework for the study of the political economy of policy-making mainly in Japan and other developing countries. Its main concern is not any particular policy itself but the political and economic factors that affect the decision-making and implementation of fiscal and other governmental policies. Economics and economists are usually concerned with the former; namely, what policies are appropriate in a given economic situation to attain certain policy objectives, such as economic growth, full employment, price stability, or redistribution of income and wealth. But adopted policies are often not the policies that economists recommend as the best or even the second best. The main reasons are that policies are made not just on the basis of economic analysis but under the influences of non-economic, social, and political forces. Moreover, policies must be put into practice in a society which somehow must accommodate itself to the vested interests of various pressure or special interest groups.2 The influence of these non-economic factors seems to be more important, or at least less transparent and non-systematic, in developing countries than in the developed countries. Recommendation of any economic policies must take into account these political and social factors and clearly state the assumptions about the responses of the social groups involved in the execution and implementation of those policies.

Macroeconometric modeling of Japan

This book offers the representative macro-econometric models and their applications for the Japanese economy in different development stages throughout postwar years up to the present. It presents a summary of three types of macro-econometric models and analyses:• Social accounting analyses of national income and related indices - following the tradition of C Clark, S Kuznets, R Stone and World Bank Development Reports;• Inter-industrial and inter-regional analyses of the Japanese economy a la W Leontief and the CGE (computable general equilibrium) type of applications to Comprehensive Development Plans;• Macro-econometric model building for the Japanese economy and its applications with a survey of various models in Japan including the historic Osaka University ISER (Institute of Social and Economic Research) model and present day Government models.As many Asian economies are going through the stages of development that Japan has experienced for the past few decades, to them and other developing countries this book will be extremely relevant as a reference for years to come.

Policies for Economic Development

This chapter presents a summary of and reflection on the Japanese experiences with economic and social policies in postwar period and thereby tries to offer a frame of reference for examining and designing development policies in other countries. The success story of Japanese development is not just a demonstration of growth but offers a rich jewel box of policy instruments as well. The main purpose is, therefore, to explain the issues that Japan has faced and the policy measures that she has employed to resolve them. Japanese economic policies have been different from the policies of the United States and Europe in many ways. The latter more or less followed the standard textbooks or, in the case f the English Labor Party, the idea of the welfare state. But Japanese policies have been basically a search for the ways and means to change an underdeveloped economy into an industrial society comparable with those in the West. In this sense they are much more relevant to the policies in Asian and other developing countries. In Asian economies, the human factor played especially a noteworthy role in development In this respect too Japanese experiences seem to offer good precedents along with the weakness. After the discussion on policy problems, some remarks are added on the common features of Japanese and Asian development in two respects: (a) acceleration and deceleration of growth rate and (b) income distribution in Asian economies.

The Challenge of the Rising Sun

The unprecedented growth of the Japanese economy in the 60’s not only amazed many economists and raised various questions in their minds but also led a number of capable foreign journalists to serious consideration of the nature of socio-economic changes of post-war Japan. Publications like Norman McRay, The Risen Sun, Hakan Hedberg, The Japanese Challenge, Robert Guillain, Japon Troisieme Grand, and Hans W. Vahlefeld, 100 Millionen Aussenseiter: die neue Weltmacht Japan have become best sellers in Japan as well as in the authors’ countries. Taken together, they gave an amazingly vivid picture of contemporary Japan up to the 60’s. No longer would the reader of these books find the lyricism of classic Japan so beautifully described by Lafcadio Hearn (1850–1904), for instance, in his Glimpses of Unfamiliar Japan (1894). Nor would he be left with the impression that even Ruth F. Benedict’s (1887–1948) The Chrysanthemum and the Sword (1946) was still up-to-date. Japan has grown out of an old, exotic but poor land and become a modern, semi-Westernized and rich nation.

US- Japan Economic Problems

The problems between the United States and Japan in the fields of trade and defense have not changed fundamentally from the excellent summary in a prepared statement submitted to the US Congress on March 1, 1982, by John H. Holdridge, the then-US Assistant Secretary of State for East Asian and Pacific Affairs. I find myself basically in agreement with his assessment of the situation and with his recommendations relating to the directions and speed of policies to be implemented then. The climate of argument and the domestic politics that surround these issues in Japan have also been well conveyed to Congress by excellent testimonies such as those of Professor Gerald L. Curtis and others, while an interesting summary of the historical evolution of US-Japan relations, as seen by an American diplomat, was provided by Ambassador U. Alexis Johnson in his submission. Given an understanding of the economic problems by members of the US Congress and Japanese Diet and by the general public, a reasonable solution of them should not be too difficult. In reality, however, much of the strain in US-Japan relations arises from misunderstandings and from the political implications of economic issues, as well as from the different styles of the two countries in their approaches toward solving the conflicts. This chapter tries to show the common interests and values which unite the two countries despite obvious social and cultural differences. It then analyzes the problems that exist, and finally, on the basis of this analysis, offers views as to how present and future conflicts between the United States and Japan might be resolved.1

Japan and East Asia

The economic development of any national economy is possible only in the favorable international environment. Japan has not always in the very favorable international circumstance and has managed to overcome the difficulties. All the other East Asian countries and economies have had their own problems to overcome while materializing their economic development. The following is a summary of the international relations in East Asia mainly from the viewpoint of Japan.

Debt Problems and Asian Perspectives

The arguments of this chapter are mainly concerned with the financial crisis in the world in the early 80s. The crisis caused the recession in the early 80s in East Asian economies for the first time after World War II. Almost a decade later, similar financial crisis has occurred in East Asian economies. To trace the serious debt situations of many developing countries is by no means easy. The author took some pains to do the work around 1983 to 84. The financial situations in 1997 to 98 look very much alike, only more serious this time. Similar studies are urgently needed for the current conditions in East Asia. The following examination refers to almost all developing countries in the world, because the oil crisis then was global. It should be remembered, however, that the present financial crisis in East Asia was preceded by the similar crises in Mexico in 1994 and then other Latin American countries. The government and financiers in East Asian economies should have learnt from the lessons in these two preceding crises. Both crises are very similar. Many warnings given by wise experts in the 80s and by IMF or ADB have been ignored by ignorant and too ambitious politicians, bankers and businessmen.

Japanese Style Management in Japan and Asia

The Japanese style management has been studied by many experts mostly on the bases of case studies. The author has undertaken an extensive survey studies in Japan and many East Asian countries about ten years ago and again in China and Japan in recent years. The earlier study included Japan, South Korea, Taiwan, Hong Kong, the Philippines, Thailand, Malaysia, Singapore and Indonesia. Our studies revealed the extent to which the so-called Japanese style management like life-time employment is really practiced in Japan. We found that it was not so widely practiced as many text books say and it is changing in recent years. One weak point of our studies was, however, that we could not conduct our questionnaire survey in China, because Japan had not made any direct investment to speak of until the late 80’s. The boom of Japanese FDI in China in the late 80s and the early 90s opened the possibility of our renewed questionnaire survey in China. The contributions of Japanese private enterprises are very great in promoting the development of East Asian economies, so that their management styles must be influencing the business culture in East Asia. When they go abroad, they have no choice but to practice what they know and believe in. It is basically the subject of this chapter. This chapter gives a summary of our findings in these two kinds of surveys at intervals of about ten years.

Japanese Savings, Growth and Housing

The Japanese high ratio of gross capital formation to GDP is well known as is shown by Table 4.1, but it is not always recognized that it has been supported primarily by the domestic savings throughout the postwar years. Needless to say, this has been possible due to the high rate of saving in Japan.