Yoichi Matsubayashi

Some international evidence on the stability of aggregate import demand function

This paper empirically analyses the stability of the aggregate import demand function for G7 countries. The standard cointegration test and a test developed by Gregory and Hansen are performed. The results of standard cointegration tests suggest that there is no stable cointegrating relation between real import, real GDP and relative import price for all G7 countries. The cointegrating relation is empirically supported for France and Germany if structural change for cointegrating vector is explicitly taken into consideration. The cointegrating relation is empirically rejected for Canada, Italy, Japan, the UK and the USA. Thus, the stimulation of domestic business conditions will not necessarily link the quantity of imports for these five countries.

Exchange Rate, Expected Profit and Capital Stock Adjustment: Japanese Experience

This paper empirically investigates the impact of exchange rate shocks on capital stock adjustment in the Japanese industry. An intertemporal optimization model is developed, in which an individual corporation in an open economy adjusts its capital stock according to Tobins q. By explicitly considering the marginal q, the transmission mechanism from real exchange rate shocks to investment dynamics is examined based on the Vector Autoregressive model. Empirical evidence suggests that the depreciation of the Japanese yen increases the expected profitability of the firm and stimulates investment, especially in the machinery sector.

Global Linkages and Economic Rebalancing in East Asia

In the wake of the global financial crisis, leading industrialized countries have managed to show only a gradual recovery, while East Asian economies have surged ahead. In particular, China achieved growth in excess of 10% in 2010 and is expected to continue growing at a rapid pace. It appears that in the coming years, East Asia will play an even greater role as a growth center leading global economic expansion. Following the Asian currency crisis of 1997–98, consumption and investment in the region decreased considerably, and East Asian economies recovered on the strength of exports. Presently, however, amid a less-than-robust recovery in the US and Europe, the sustainability of East Asias reliance on export-led growth has been called into question. The regions transition to growth based on a balance of foreign and domestic demand is important for both building a stronger foundation for sustainable growth and buttressing global economic expansion. Moreover, the rebalancing of demand in East Asia holds the key to rectifying global current account imbalances — the disadvantage of uneven international capital flows. This unique volume illuminates policy issues involved in the efforts to promote the rebalancing of demand in East Asia. Contents: Decoupling ia A Re-Examination (Hiroshi Tsubouchi and Hideaki Matsuoka) Business Cycle Synchronization and Production Fragmentation in East Asia (Fumihide Takeuchi) Financial Market Linkage in East Asian Countries (Kyosuke Shiotani and Yoichi Matsubayashi) The Impact of East Asian FTAS on the Structure of Demand (Hikari Ban) Inflation Targeting in South Korea, Indonesia, the Philippines and Thailand: The Impact on Business Cycle Synchronization Between Each Country and the World (Takeshi Inoue, Yuki Toyoshima and Shigeyuki Hamori) Globalization and Economic Growth in East Asia (Fengbao Yin and Shigeyuki Hamori) Can South¨CSouth Trade Be a Driving Force for Future Economic Growth? (Shigesaburo Kabe) An Empirical Analysis of the Determinants of Household Saving (Consumption) in China: A Panel Analysis of Provincial Data, 1995¨C2010 (Guifu Chen) Financing Infrastructure Construction in China (Long Ke) Is the Renminbi Appreciating Fast Enough? (Takuji Kinkyo) Readership: Researchers and the general public who are interested in the future development of South East Asia. Key Features: The topic, i.e., Rebalancing Demand in East Asia is a hot issue key to understanding the future development of East Asia This volume provides a comprehensive overview with respect to the topic of Rebalancing Demand in East Asia This book reviews the current situation of each topic, so that readers can easily understand the material This book also empirically analyzes each topic and proposes some policy implications to understand the future development of this region

Capital Accumulation, Vintage and Productivity: The Japanese Experience

In this paper we quantitatively examine the relationships between capital accumulation and vintage, as well as productivity of industries in Japan between 1980 and 2007. We based this analysis on a detailed measurement of capital stock as reported in financial data of firms listed on the Tokyo Stock Exchange and several secondary markets, like Mothers, We measured the vintage index and total factor productivity and carried out preliminary work required during empirical analysis. Subsequently, we conducted different kinds of estimations. Based on the empirical analyses, we confirmed that vintage had an effect on productivity in all industries studied. This effect was notable in the material, general machinery and transport equipment industries. In addition, by observing chronological changes of the vintage effect, we confirmed that vintage exerted a significant influence during the period of economic expansion,.particularly during the economic upturn which started in 2000, where strong vintage effects were generally observed in all the industries. It was clear that the rejuvenation of capital equipments during that period resulted out of the existence of a strong productivity effect. On the other hand, during the bubble period of late 1980s, vintage exerted no observable effects on productivity despite vivacious increases in investment.This shows that investment during this period was not necessarily productive and was likely to produce just a temporary boom. In light of this, we reconfirmed that the relationship between vintage and productivity changed in subtle ways in response to the phases of economic cycles.