The International Economy
Online ISSN : 1884-4367
Print ISSN : 2186-6074
ISSN-L : 1884-4367
Current issue
Displaying 1-8 of 8 articles from this issue
2019 JSIE Kojima Kiyoshi Prize Lecture
  • Naoto Jinji
    2021 Volume 24 Pages 1-22
    Published: 2021
    Released on J-STAGE: March 15, 2022
    Advance online publication: April 10, 2021

    I examine whether recent regional integrations are deeper than older ones using data on the contents of trade agreements. I show that although recent regional integrations are deeper than older ones, the coverage of policy areas is mainly restricted to the provisions that fall under the current mandate of the WTO discipline. I also show that the depth and breadth of RTAs are heterogeneous according to types of RTAs, country pairs, and particular signatory countries, though the differences tend to be narrowing. Then, reviewing the findings of recent studies, I argue that deep integration delivers many gains to trade in goods, production networks, and research and development. However, further studies are required to fully understand the gains and losses of deep integration.
    JEL classification:F13;F14;F15

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  • Yumiko Taba
    2021 Volume 24 Pages 23-57
    Published: 2021
    Released on J-STAGE: March 15, 2022
    Advance online publication: February 28, 2020

    This study clarifies how governments’ industrial policies affect the firm’s R&D choice when firms simultaneously conduct both cost-reducing process and quality-improving product R&D. We found the following results. Under Cournot competition, while output increases when quality improves and/or the production cost decreases, output decreases as the proportion of product R&D becomes higher compared to that of process R&D. Under Bertrand competition, whether prices become higher or lower depends on the degree of fraction of investment in two types of R&D. If firms only conduct one of the two kinds of R&D, this effect does not exist. A government always subsidizes its domestic firm’s R&D investments.

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  • Akihiko Yanase, Masafumi Tsubuku
    2021 Volume 24 Pages 58-79
    Published: 2021
    Released on J-STAGE: March 15, 2022
    Advance online publication: January 15, 2021

    This paper develops a two-country model of intraindustry trade in which overseas shipping incurs transport costs. National governments make investment in the transport infrastructure to reduce the transport costs and enhance national welfare. This paper investigates what patterns of public investment can be derived as equilibrium outcomes and whether these equilibrium investment patterns are socially efficient. It is shown that, among others, if the public investment technology exhibits increasing returns at an international level, coordination problem of public investment may occur.

    JEL Classification Number:F12;H54;N70

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  • Hirotaka Suzuki
    2021 Volume 24 Pages 80-125
    Published: 2021
    Released on J-STAGE: March 15, 2022
    Advance online publication: May 15, 2021

    This study evaluates the effectiveness of the European Central Bank’s unconventional monetary policy. We assume Calvo-type friction and develop a forward-looking New Keynesian state-space model with an error correction term to address both unit roots and stationary variables at once. Subsequently, we decompose the nominal effects into asset pricing kernels and real effects. Thus, we show empirically that the corporate sector purchase program (CSPP) and CSPP-based bank lending to households positively affect trend inflation due to credit easing. However, due to asymmetric development within the European Union and the Euro area, there is no consensus on whether they should be continued after the crisis.

    JEL classification:C32, E12, E52, E58, F33.
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  • László Tőkés
    2021 Volume 24 Pages 126-141
    Published: 2021
    Released on J-STAGE: March 15, 2022
    Advance online publication: August 31, 2021

    One important aspect of globalization is the cross-border flow of capital, namely foreign direct investment that is considered to be an important engine of economic growth via productivity enhancement. One important form of foreign direct investment is cross-border mergers and acquisitions (M&As). The effect of M&As on firm-level productivity has been analyzed in many papers. This article provides a survey of this literature following a kind of evolutionary perspective:The main results are presented following advances in data usage and methodology. Further research questions are also formulated.
    JEL code:F21, F43

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  • Hongyong Zhang
    2021 Volume 24 Pages 142-165
    Published: 2021
    Released on J-STAGE: March 15, 2022
    Advance online publication: December 17, 2021

    Using quarterly aggregate-level data on Japanese manufacturing affiliates in major host countries, this paper examines the impact of COVID-19 on global production by multinational corporations. Our findings can be summarized as follows:First, we found significantly negative impacts of COVID-19 on the performance of Japanese affiliates, especially sales in Q2 2020. Second, local sales, exports to Japan, and exports to third countries almost recovered in Q4 2020, implying the resilience of multinational production and global supply chains. Third, lockdown policies, in particular workplace closure orders for all-but-essential workplaces had significant negative effects on the sales and employment of Japanese affiliates.

    JEL Classication: F14, F23

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  • Hiroyuki Nishiyama, Yasuhiro Gintani
    2021 Volume 24 Pages 166-186
    Published: 2021
    Released on J-STAGE: March 15, 2022
    Advance online publication: January 14, 2022

    Does globalization expand the economy and deliver a welfare gain? To answer this question, we develop a trade model with firm heterogeneity and a fair wage-effort mechanism. We reveal that the effect of trade liberalization on wages and unemployment depends on the degree of openness. We also suggest that it clearly increases labor productivity, but may decrease GDP and deteriorate welfare. We then simulate our model to better understand the welfare impact of trade liberalization. For the typical parameter values used in the literature, a collective view of earlier works that trade liberalization improves welfare is rejected.

    JEL Classification:F12;F16;F66

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