Japanese Economy in Transition

Japanese Economy in Transition

Ryoichi Imai

Kyushu University

2020/7/12

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Outline

We discuss the latest issues in Japanese economy. The course consists of two parts.

1. The regional revitalization of Japan, income redistribution between urban and regional areas.

2. The growth strategy and innovation.

Requirements and Grading Assessment (in parenthesis)

1.     One presentation of the selected issues. You have to make a set of slides using Microsoft PowerPoint or equivalent software. (40%)

2.     One final take-home examination –subject to change. (40%)

3.     Regular attendance and participation in class discussion. (20%)

You can get two credits by completing all the requirements described above. Some students need three credits in order to transfer credits in accordance with their home university's academic rule. You can get three credits by making a second presentation in different topics in addition to the requirements as above.

Schedule

The class will start with a series of my lecture. Later students will present their assignments in the class. A detailed weekly plan will be as follows.

Sorry, some readings are in Japanese m(_ _)m

1 (4/15). Introduction: Coronavirus Pandemic and the Economy

2 (4/22). Facts

3 (5/8, Friday). Economic Analysis

4 (5/13). Kyushu Economy in the World

Introduction to the Kyushu Economy for International Investors

Summary of Kyushu Economy 2015

5 (5/20). Revitalizing Regional Economy

Japan Revitalization Strategy
National Strategic Special Zones (in Japanese)

Takatoshi Tabuchi (2013) Historical Trends of agglomeration to the capital region (in English)

Definition of Urban Area by the Ministry of Internal Affairs (in Japanese)

Demographia World Urban Area 2015

Population Concentration on Urban Area (in Japanese)

Working population across industries by prefectures (in Japanese)

GDP by prefectures
Productivity Convergence across Prefectures in Postwar Japan

Scale Economy in Agriculture (in Japanese)

Engel Coefficient (Ministry of Internal Affairs)

Engel's coefficient rising in Japan (Japan Times)

Japan’s Food Industry

International Comparison of the Engel Coefficient

International Comparison of Agricultural Subsidy

Agriculture in America

6 (5/27). Urban-Regional Redistribution and the Heisei Municipal Mergers

The benefit/cost ratio by prefectures
Transfer through the special account for road maintenance
Regional gap in the consumption tax revenue

National Tax Agency State-Regional Division of Income Taxes (J)
- State-Regional Division of Consumption Taxes (J)

Corporate Tax in Japan (J)

Takero Doi (2010) Poverty traps with Local Allocation Tax grants in Japan (in English, but technical)

Takero Doi (2006) Interregional Income Redistribution Reconsidered (J)

Kazuhiko Tomiyama (2014) Sectoral Change in Industries and Higher Education Reform (J)

Koyotaka KOICHI (????) Development of Municipal Mergers in Japan (in English)

Municipal Mergers and Dissolutions in Japan (in English)

Anthony Raush (2010) Post Heisei Merger in Japan (E)

Before and After the Heisei Municipal Mergers (J)

Yubari, Japan: a city learns how to die (E)

German GDP

Dani Rodrik (2010) Greek Lessons for the World Economy (E)

Population, area, density by prefectures (J)

Aging ranking by municipals (J)

Regional average income ranking by municipals (J)
Regional average income tax revenue ranking by municipals (J)

Municipals in Tokyo (J)
Regional average income tax revenue ranking by municipals in Tokyo (J)

Osaka referendum causes turbulence for LDP, Komeito
Redistribution within Osaka City (J)

7 (6/3) Regional Gaps in Economy

Regional Gaps in EU, US, and Japan

Nominal GDP per capita in Europe

Real GDP per capita in the world

Prefectural income per capita in Japan

List of US states by GDP per capita

Price Level Index for Europe

Student commutes to University of London from Poland to save money on accommodation rent

CPI by prefecture in Japan

International Comparison of CPI

Birth Rates in UK

8 (6/10) Tourism

Annual Report on Tourism (Ministry of Land, Infrastructure, Transport and Tourism)
Concentration of Tour Demands (J)
Economic Impacts of Tourism (J)

Dispersing the National Holidays (J)

Yoshiro Hoshino (2015) Holidays must be dispersed (J)
Hoshino Resorts TOMAMU (J)

NHK(2014) Is it possible to disperse holidays? (J)

Agriturism in Ukiha, Fukuoka (J)
Ukiha-city (J)

National Holidays (J)

Minpaku (Japan Times)

9 (6/17) Urban and Nationwide Railway Transportation

On the Effects of the Shinkansen (J)
Economic Consequences of the Shinkansen (J)

passenger transportation share by vehicles (J)
distribution traffic share by vehicles (J)

Annual Report on JR East (J)

Accounting Report on JR Shikoku 2015 (J)

Accounting Report on JR Hokkaido 2015 (J)

Accounting Report on JR Kyushu 2014 (J)
JR Kyushu should not be listed on TSE before it pays back its debts (J)
Government decides to list JR Kyushu on TSE in 2016 (J)

Balance of Payment of JR Groups: East West

Japan Railway Construction, Transport and Technology Agency (J)

Kansai Prefectural Governors approve the Maibara Route (J)

Seven Stars in Kyushu
Private Resort – Tenku no Mori
Tour Trains of JR Kyushu (J)

Linear Chuo Shinkansen (J)

10 (6/24) Young People Move across Prefectures

Prefectural Economic Account

University Capacity in Japan
Regional Gaps in Higher Education
Private Universities in Japan

Nagano University
Higher Education Opportunities in Nagano Prefecture

Students Life Survey by JASSO
Students Accommodation by type of Universities

Population Pyramids

OECD: Education at a Glance (2017)
(A7) What are the financial incentives to invest in education?
PDF

Kazunori Shima (2017) Returns to invest in higher education in Japan (J)

Area Ranking of Universities in Japan

11 (7/1) Lecture continues

12 (7/8) Students’ Presentation 1: Corona Virus Pandemic

Review the process, policies, reactions from society, debates, and future perspectives.

Make a slide set (PDF), name it as <economy 1-LAST NAME-first name> and submit it to the file sharing system one day before the presentation.

Each presenter is supposed to speak for 20 minutes.

Taiwan - Yang

United Kingdom - Emma

France - Gregoire

United States - Phoenix

13 (7/15) Students’ Presentation 2: Regional gap and young people’s move

Review the current states of regional gap and its effects on the move (immigration) of young people.

What are the government policies to restrict or encourage people’s move across regions?

What are the roles of the central and regional governments? What are the divisions of tasks between central and regional governments?

Make a slide set (PDF), name it as <economy 2-LAST NAME-first name> and submit it to the file sharing system one day before the presentation.

Each presenter is supposed to speak for 20 minutes.

Taiwan - Yang

United Kingdom - Emma

France - Gregoire

United States - Phoenix

Final Take-Home Examination (NEW 2020)

Course Evaluation

Click and follow the instructions Economy

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Skipped in this year:

Short Lecture on Japan’s Automobile Industry (4/20)

Japan’s UNESCO World Heritage Page
Miike Coal Mines (J)
Gunkanjima Concierge (J)

Ito Den-emon House (J)

Hanako to Anne (Episode 95)

Toyota has an amazing History Page!

Toyota Hydrogen Fuel Cell Vehicles
WSJ on hydrogen stations
WSJ on the hydrogen-powered car: Mirai.

The Telegraph: Toyota’s driverless car

Abenomics and Japan’s growth strategy

International companies do not always create employment or bring tax revenues to the US.

The Baumol’s Cost Disease

Where is the productivity growth?

Ideas aren’t running out, but they are getting more expensive to find | VOX, CEPR’s Policy Portal

The productivity slowdown and labour’s income share

The safe asset shortage, the rise of mark-ups, and the decline in the labour share

Labor share is declining in G7 economies

Labor Income Share - OECD

Changes in Industries and Occupations – Ministry of Health, Labor, and Welfare

Nordhaus (2016) Are we approaching an economic Singularity?

Krugman (1996) Wonders of technology not so wondrous

The Unofficial Paul Krugman Archive

Abenomics and Macroeoconomics

The 10-year maturity government bonds of Japan
The Kuroda’s announcement on April 4^th amazed the western media
Iida’s comments on the consumption tax rate rise
Macroeconomics supporting Abenomics
Jordi Gali
(2014) Thinking the unthinkable: The effects of a money-financed fiscal stimulus
(2015) Start the presses: reconsidering a money-financed fiscal stimulus
(2014) The Effects of a Money-Financed Fiscal Stimulus

4 Signs of Abenomics' Dismal Failure

Nikkei Average (Tokyo Stock Exchange)

JGB 10 yrs rate
JGB 10 yrs rate
JGB average

The leading advocate for NIRP:
Miles Kimball (2016) Negative Interest Rate Policy as Conventional Monetary Policy
Japan Times: The NIRP is unpopular

Unemployment Rate Labor Market Tightness
Record 97% of university graduates land jobs

Monthly Employment Survey April 2016
Monthly Employment Survey

GDP per person employed (constant 2011 PPP $)
GDP Accounting of Japan (内閣府)　(2014-EXCEL)

Consumers’ Price Index (CPI) (総務省) April 2016

Fiscal Balance –International Comparison
Simulation - Tokyo Foundation Model

Household Survey April 2016

Consumption Level Index
BOJ Consumption Index (J)

Why do real wages stagnate even though the labor share of GDP remains constant?
Kawaguchi (2016) Real Wages and Terms of Trade (J)

Philips Curve in Japan
Real GDP per person employed in Japan

MMT
Bloomberg: Stephanie Kelton
AOKI Yasuki: MMT and the Post-Keynesian
MATSUO Tadasu: Theories of Anti-Austerity Economic Policy and their Synthesis
Ministry of Finance: The Current States of Japan’s State Budget Balance

Rethinking Macroeconomics

解雇規制を考える – A Short Lecture for High School Students

Olivier Blanchard (2019) Public Debts and Low Interest Rates

Fiscal Consolidation

Tax revenues are not enough to cover the expenses

Government budget for 2016 Slide

International Comparison of Government Debts

Deficits in Central and Regional Governments

How consumption tax revenues are shared by central and regional governmentsIdeas aren’t running out, but they are getting more expensive to find

| VOX, CEPR’s Policy Portal (Morgane)

1. Routinisation, globalisation, and the fall in labour’s share of income (Clara)

2. Concentrating on the Fall of the Labor Share (Rochelle)

a What is the tendency that is observed in the US economy, which contradicts one of the famous Five Stylized Facts, pointed out by Kaldor (1961)?

b Why is international trade not an important reason for the decrease in the labor share of the US economy?

c Why is the rapid decline in the prices of information and communication technology equipments not consistent with the decline in the labor share?

d What is the new hypothesis the authors propose in order to explain the decline in the labor share?

Economic Policy Debates

1. Understanding the destination-based approach to business taxation (Mathieu)

2. Monetary policy and inequality: A new channel (Nicolas)

3. The US corporate tax cut debate (James)

Industrial Transformation

1. The 1990s trade and wages debate in retrospect (Ya-Hsuan)

2. The declining share of manufacturing jobs (James)

3. Tax evasion and inequality (Extra) (Yarrow)

4. Aggregate productivity and the rise of mark-ups (Extra)

① How should we decompose the factors of economic growth, if the economy is not perfectly competitive?

② “From a social perspective, low-mark-up firms are too large and high-mark-up firms are too small”. What does this mean?

③ Consider an industry consisting of Firm 1 with a higher mark-up ratio, and Firm 2 with a lower mark-up ratio. What will happen if there is a productivity improvement in Firm 1?

④ Why does “eliminating mark-ups would raise aggregate productivity by around 40%”?

⑤ Why did Harberger (1954) under-estimate the allocative loss caused by monopoly than the research by the authors?

⑥ What is the positive effect of monopoly to improve productivity that works in an opposite direction to the allocative efficiency discussed as above?

⑦ “Eliminating mark-ups in 1997 would have only raised aggregate productivity by around 5%-20%”. Why?

Miscellaneous Topics

Contents and Culture Industry

A short lecture on Kabuki 2015
Shochiku Kabuki Website
Kabuki Actors (Current)
Hakata-za Theater
Kabuki on NHK
How to watch NHK World TV

Ministry of Economy, Trade, and Industry (2014) Contents Industry: Today and the Future (J)
Ministry of Economy, Trade, and Industry (2010) Toward Economic Prosperity based on Cultural Industry (J)

The Economics of Orchestras

Association of Japanese Symphony Orchestras (J)
Annual Report of the Members 2013 (J)
Annual Report of the Members 2004 (J)

Financial Reports of the New Japan Philharmonic Orchestra (J)

League of American Orchestras
US Orchestra Facts March 2015

Energy Crisis and Local Economies

Healthcare Cost Control in Japan

International Comparison of Medicare System (J)
In Japan, All-Payer Rate Setting Under Tight Government Control Has Proved To Be An Effective Approach To Containing Costs