Yukinobu Kitamura

Household Savings and Wealth Distribution in Japan

Publisher Summary This chapter focuses on the household savings and wealth distribution in Japan, explaining saving rates by income class and the construction of social-security wealth. In the National Survey of Family Income and Expenditure (NSFIE), gross yearly income includes wages and salaries, income through business and work at home, returns from assets, social-security benefits, donations, and consumption in kind. Japans saving rate is not as high as is commonly thought. The accumulation of wealth by Japanese households starts very early and lasts until very late in life, with unconsumed wealth transferred to the next generation in the form of bequests. Motivation for the acquisition of owner-occupied housing remains strong, and this promotes high saving, especially because of limited mortgage markets and high down-payment requirements. The most discussed data problem with the NSFIE is the sample selection bias with old households.

Can We Stabilize the Price of a Cryptocurrency?: Understanding the Design of Bitcoin and Its Potential to Compete with Central Bank Money

This paper discusses the potential and limitations of Bitcoin as a digital currency. Bitcoin as a digital asset has been extensively discussed from the viewpoints of engineering and security design. But there are few economic analyses of Bitcoin as a currency. Bitcoin was designed as a payments vehicle and as a store of value (or speculation). It has no use bar as money or currency. Despite recent enthusiasm for Bitcoin, it seems very unlikely that currencies provided by central banks are at risk of being replaced, primarily because of the market price instability of Bitcoin (i.e. the exchange rate against the major currencies). We diagnose the instability of market price of Bitcoin as being a symptom of the lack of flexibility in the Bitcoin supply schedule ‐ a predetermined algorithm in which the proof of work is the major driving force. This paper explores the problem of instability from the viewpoint of economics and suggests a new monetary policy rule (i.e. monetary policy without a central bank) for stabilizing the values of Bitcoin and other cryptocurrencies.

How to Make the Japanese Public Pension System Reliable and Workable

This paper has two objectives. The first is to identify current problems in Japans pension administration. The chief problem is a weak governance structure. In particular, the current governance structure ignores the role of pension participants. A rigorous division and clear assignment of responsibilities to each of the pension participants, the Social Insurance Agency, and the Ministry of Health, Labor and Welfare is urgently needed. Given rapid demographic change, the second objective is to consider the case for full tax financing of the National Basic Pension. It is estimated that the net burden would vary across different cohorts, but we demonstrate that the net burden can be smoothed across different cohorts. This result is quite different from that in the 2008 Interim Report of the Japanese National Council on Social Security.

Marriage Promotion Policies and Regional Differences in Marriage

Existing studies on marriage have highlighted the importance of paying attention to local characteristics, but few Japanese studies have been conducted on marriage, taking regional differences into account. This article examines the factors that influence marriage using data from localities across Japan with an eye toward identifying regional differences, and analyzes the effects of marriage promotion policies in depopulated localities. The results of a basic analysis and regression analysis reveal the following. First, the ever-married ratios among men and women vary significantly depending on the level of urbanization where they live, but the male employment rate has a positive correlation with male marriage while the male-female ratio has a negative correlation with male marriage and a positive correlation with female marriage. Second, the results confirmed that prefectural differences in marriage cannot be explained by factors such as the level of urbanization, the male-female ratio, or employment conditions. However, this study was not able to identify the factors that explain these findings. Third, the results revealed that marriage promotion policies in depopulated localities have a greater effect on the marriage of females than of males.

Reflections on New Financial System in Japan: Participation Costs, Wealth Distribution,and Security Market-Based Intermediation

Part 1: Financial Institutions and Financial Markets in Japan and East Asia Part 2: Issues in Governance of Corporate Sector and New Technology Part 3: Toward a New Design of Financial System

Decomposition of redistributive effects of Japanese personal income tax, 1984–2009

This study examines how changes in the rate structure, deductions, and tax credits for personal income tax affect the inequality of posttax income, using micro data on Japanese households. The main contribution is the use of the fixed-income approach to assess the decomposed redistributive effects of the personal income tax. Several insights are obtained. First, the redistributive effects of the Japanese income tax declined during 1984-2009. Second, base effects substantially exceeded rate effects over this period. Third, credit effects greatly decreased the redistributive effect, as Japanese tax credits were proportional to tax liabilities with upper limits.

Redistributive Effects of Income Tax Rates and Tax Base 1984-2009: Evidence from Japanese Tax Reforms

The primary objective of this paper is to examine how and to what extent changes in income tax rates and income tax deductions affect income inequality from longitudinal perspectives, by using microdata from Japanese individuals and households. The findings of this paper could shed light on the effects of tax rates and tax deduction on tax progressivity. First, redistributive effects of the Japanese income tax are likely to decline for the period 1984-2009. Second, the income tax reforms, i.e., reduction in tax rates and increase in tax base, give rise to greater redistributive effects of income tax rates and lower redistributive effects of tax base. Third, progressivity measures show the same trends with respect to the redistributive effects of tax changes on pretax income over the period.

Income Tax Reforms and Redistribution by Age Group: Evidence From Japan

Abstract In the 1980s, tax policy changes mitigated the redistributive effect of income tax. The present study attempts to explore how different the redistributive effect of the income tax reforms in Japan is among age groups, using Japanese household microdata for the period 1984–2009. The following results are obtained. First, the overall redistributive effect was greatest for the elderly group, followed by the middle-aged group, and then the young group. Furthermore, this trend increased steadily over time. Second, the difference in total redistributive effects between the young and elderly increased owing to a large reduction in the base effect for the young.

Tax Reforms, Redistribution and Population Aging: Evidence from Japan

In the 1980s, income tax rates decreased and income tax deduction thresholds changed through income tax reforms in the OECD countries. Likewise, in Japan in the 1980s and 1990s, income tax rates decreased and the income tax deduction threshold increased. Recently, it has been pointed out that inequality and redistribution vary over different age groups. This study attempts to explore how different the redistributive effects of the income tax reforms in Japan are among various age groups, using Japanese household microdata for the period 1984–2009. The following results are obtained. First, the overall redistributive effect was greatest for the elderly group, followed by the middle-age group, and then the young group for the period 1984–2009. Furthermore, this trend increased steadily over time. Second, the difference in the total redistributive effect between the young and elderly increased owing to a large reduction in the base effect for the young. Third, the redistributive effect of income tax for the older elderly group is smaller than that for the younger elderly group. The consequences from Japan’s experience could provide insightful suggestions for redistribution policies in other countries, most of which will face an aging society in the future.

Is Bitcoin the Only Cryptocurrency in the Town? Economics of Cryptocurrency And Friedrich A. Hayek

This paper overviews the entire landscape of Bitcoin-like cryptocurrencies. Bitcoin has not emerged out of cryptocurrency competition, but rather became a dominant currency as the first broad market based cryptocurrency. But there are more than a hundred of cryptocurrencies in the market, and some are catching up to Bitcoin. This is a healthy sign of currency competition a la Hayek. Through this competition new technological and security innovations may emerge. In this paper, we point out potential problems with Bitcoin and propose some ideas for an alternative cryptocurrency.