Well-known core features of the Japanese-type corporate system, such as the main bank system, the stakeholder corporate governance system, the life-time employment system, and supplier networks have undergone significant changes in the long-lasting recession after the bursting of the bubble economy. Meanwhile, new institutional arrangements emerged through legal reforms, as well as innovations in corporate finance and the organizational architecture of firms. Many changes suggest a step toward more market-oriented models like the US or UK. However, less agreement exists over the underlying significance of these changes and the extent which they imply a departure from the past Japanese model. This article provides our understanding of the current process of institutional continuity and change in the Japanese-type corporate system, and addresses how main ingredients of this system have changed, and the inter-relationship between those changes. To begin with, we compare the 1990s recession with the 1970s recession by checking macro-economic indicators. Concerning the former one, we deal with two phases of both recessions after the bursting of the bubble and after 1997 banking crisis. Next, we provide empirical findings that the core elements of the Japanese-type corporate system have changed significantly after 1997 banking crisis. In this sense, the year 1997 represents a more dramatic turning point. Furthermore, we examine more precisely changes in both domains of finance and employment. Changes have not proceeded uniformly, and have been occurring unevenly across different groups of firms, leading to greater heterogeneity among firms within Japan. The result of this process of changes has been the emergence of new hybrid forms of firm organization, named the "New J-type Firm," which is a new recombination between the governance for shareholder value, merit (or performance)-based payment systems and the preservation of life-time employment practice. This hybridization refers to the innovative recombination of elements in ways that rejects both an economic determinism of a single best model, as well as societal determinism which suggests that practices intrinsic to each country can never be transferred. However, the emergence of new hybrid forms of firm organization in Japan presents some puzzling questions. One question we have to ask is whether new hybrid forms of firm organization can be stable and be sustained over a long period, or whether such hybrid model may represent only a transitional stage toward more fully market-oriented model. Fornow, the future of this hybrid model cannot be predicted precisely. Meanwhile, the emergence of new hybrid forms of firm organization certainly does not mean the abandonment of lifetime employment practices, especially in large Japanese firms. However, next another question we have to ask is whether the traditional arrangement of long-term formation of skill and competence by in-house training can be sustained, or whether the high functional linkage between the skill formation and labor productivity can be sustained. The answers to these questions also remain unknown.

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It has often been argued that the relationship-based or bank-centered financial system should evolve into the market-based indirect financial system, reflecting the Japanese economy's experience since the 1980s. The financing of non-financial domestic sectors through bank lending has reduced since the late 1990s, as evidenced by the data from the Flow of Funds Accounts. This paper chronologically examines the evolution of the Japanese financial system since the early 1980s, focusing on the problems facing the banking sector. The examination yielded the following findings and interpretations. First, the deregulation of the capital market since the late 1970s led to a reduced dependence of non-financial large firms on bank debt since the early 1980s and an increase in bank lending to specific sectors such as real estate, construction, and retail businesses, resulting in deteriorated soundness of bank management. Second, the credit expansion in the late 1980s was facilitated by regulatory measures which failed to keep pace with the sophistication and diversification of banking activities, as well as by the monetary policy assigned to multiple targets such as stabilizing inflation, stemming the appreciation of the yen, and containing a rise in asset prices. Third, during the period from 1998 through 2003, without reasonable costs imposed on the financial sector, public funds of 10.4 trillion yen were injected to deal with the failed financial institutions including the large ones. Fourth, the Quantitative Easing Policy by the Bank of Japan provided the banking sector with the financial environment free from liquidity problems during the period from March 2001 through March 2006, when both the disposal of non-performing loans and the shake-out of small-to-medium-sized financial institutions were accelerated under the Financial Revitalization Program, which was launched in October 2002. The financial sector should contribute to the sustainable growth of the regional economy, in exchange for the favorable financial environment granted by the central bank. Fifth, securities backed by loan assets, such as RMBS and CMBS, have been issued in the amount comparable to that of straight corporate bonds in the Japanese financial market since 2004. Market-based indirect financing through the securitization of loan assets will be promoted in the Japanese financial system, requiring the improvement of existing regulations on loan origination and securitization procedures.

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The purpose of this paper is to investigate how economic policy has developed in Japan since 1980s and to clarify differences between economic policy from the latter half of 1980s to the former half of 1990s and that since the latter half of 1990s. The former type of economic policy package called "structural adjustment policy" aims at an expanding equilibrium of a trade balance of Japan and relaxation of trade conflicts with Europe and America by means of expansion of domestic demand, public investment in particular. On the other hand, the goal of the latter type called "structural reform policy" is not to balance import with export but to realize an optimum allocation of resources from a global view. "Structural reform policy" has been formed up as policy package during the middle of the 1990s under the Hashimoto Cabinet and has been executed on the full scale during the former half of the 2000s under the Koizumi Cabinet. The Koizumi Cabinet promoted deregulation without exception in order to substitute goods and services provided by low productivity sectors for goods imported or services provided by foreign-affiliated companies and in order to open in an official market to tertiary industries, service industries in particular. In addition, Japan Highway Public Corporation and Japan Post have been privatized and the system of the Fiscal Investment and Loan Program has been reformed related to these privatizations. It is reasonable to suppose that the drastic change from "structural adjustment policy" to "structural reform policy" on a superstructural level has been caused by some structural conversion in Japanese economy on a substructural level. We can find three aspects of its structural conversion as the background of the economic policy transformation. Firstly, its overseas local production ratio has increased rapidly in the manufacturing industry. In consequence, its economic policy has come to give more weight to control of capital account balance than that of trade balance. Secondly, the number of the service industry workers has surpassed that of the manufacturing industry. As a result, the service industry has come to acquire great influence over policy formation as the examples of the privatization of public corporations and the opening in an official market show. Finally, in a structure of financial surplus or deficits by sector, non-financial corporations have turned from a deficit sector to a surplus one. During the 1990s the financial sector could invest its fund in government bonds, but the Koizumi Cabinet launched a reduction of public investment and so-called fiscal reconstruction became a subject of discussion. Such conditions around the financial sector cause the privatization of public corporations and reform of the Fiscal Investment and Loan Program, which newly provide financial corporations with promising fields for investment as a substitute of the existing private-sector capital spending and public works.

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Japan was an external demand-led economy from the second half of the 1970s to the first half of the 1980s. Then, it turned to an domestic demand-led economy supported by lively equipment investment demand and the moderate expansion of consumption demand assisted from the wealth effect of the Bubble era, which, however, did not last so long. After the burst of the Bubble, consumption demand fell rapidly. To make matters worse, Japan could not depend on external demand because of trade friction with the U.S. and European countries. These factors forced the Japanese economy to experience what was called "the lost decade." Since 2002 the Japanese economy has covertly restored its dependence on external demand at the expense of trading losses, which anyhow led to "an economic expansion without a sense of reality" that is longest in the postwar era. In the face of the price-cutting pressure arising from severe international competition under globalization, Japanese firms were forced to reduce costs, which led to wage restraint and thereby the depression of domestic consumption. Japanese manufacturing firms shifted labor-intensive process to low wages areas in Asian countries, so that the domestic manufacturing employment decreased. Meanwhile, the domestic non-manufacturing employment increased, but the labor movement from manufacturing to non-manufacturing sectors had a negative effect on the expansion of the domestic consumption because the overall wage rate in non-manufacturing was lower than that in manufacturing. The increasing current account deficit of the U.S., which has provided external demand for Asian countries over a long period of time, reached its limit. The degree of the deficit shrank in 2007. Moreover, followed by the U.S. subprime loan problem, an adjustment process of the high dollar began. Now that soaring oil and food prices deteriorate the Japanese trading losses, the ongoing dependence on external demand still aggravates the trading losses, thereby leading to a deficiency of domestic demand. Taking the observation above into consideration, I think that the Japanese economy comes under pressure to turn to wage-led growth, which is proposed by post-Keynesian economists.

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The main motivation for this article is to construct a model that induces reserve army effect within a Kaleckian model of income distribution and effective demand. Using this model, we investigate the relationship between the wage pressure and employment not only in the short run but also in the long run. The one of the features of the Kaleckian model is that the real wage rate is exogenous parameter by monopoly power of market. So the Kaleckian model excludes the reserve army effect. But much paper insists wage rate is affected by not only monopoly power but also imperfect labor market, especially employment rate and wage pressure of labor union. Some papers try to induce the imperfect labor market within the Kaleckian model. Following previous works (Stockhammer (2004), Dutt (1992)), it is difficult to develop the Kaleckian model with the reserve army effect in the long run because of the indeterminacy problem, in the sense that the long-run equilibrium point diverges from the steady state. The novelty of this paper is that we introduce not only cost minimization but also an increasing-return-to-scale production function into the model. To satisfy the stability condition, we need both increasing return to scale and the scale effect of the product function is strictly above unity or the slope of the wage-setting curve is small. Hence, the relationship between the degree of increasing return to scale, and the slope of the wage-setting curve is important to satisfy the stability condition. If the condition is fulfilled, an increase in the capital stock leads to excess supply in the product market, and a decrease in employment. This process will go on until the labor-capital ratio is equal to the desired labor-capital ratio. Another result of this paper is that an increase in the wage pressure increases employment in the long run compared to the initial level.

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This paper studies about the theory of value, which is at the commodity chapter of Marxian Economics, especially Kozo Uno's "Principles of Political Economy" (so-called Uno Theory). Recently, many theorists belonging to Uno School declare that value should be defined as the exchangeability, endowed by the commodity owner's requirement of exchange. According to these theorists, Uno's definition of value as commodities' quality of homogeneity ('Wesensgleichheit') is not so essential. But this definition should not be ignored, especially when we pay attention to Marx's thesis that the wealth of societies in which the capitalist mode of production prevails appears as 'an immense collection of commodities' ('ungeheure Warensammlung'). Each commodity has the quality of wealth as one piece of collection. In this sense, a commodity in the exchange-relation has value as homogeneity to the stock which is not yet inside the relation. If commodities are wealth by themselves, we must presume that their value are not linked directly to their constantly fluctuating exchange-value. Of course, from the point of view of Uno Theory, commodities are essentially the pure circulation-form separable from societies production. We must presume, therefore, that their value are not also linked directly to objectified ('vergegenstandlicht') labour-time or crystals of abstract labour. This problem has reference to commodity owner's reaction to the fundamental rule that he cannot realize his own commodity-value at any favorable time or at any favorable rate in the competitive commodity-circulation. In spite of such lack for the direct exchangeability, he would not give up maintaining 'an immense collection of commodities' as wealth. Then, he has to prepare for the possible fluctuation of their exchange-value and fix their permissible range during a long or short term. Otherwise, he might be forced reluctant compromise with exchange-ratio by more prepared owners. Only after it become clear that fluctuation of exchange-value would exceed their fixed range, he admits a change in commodity-value itself. Thus, this paper comes to the first conclusion that commodities are wealth because their homogeneous value has a character as subjective standard or criterion for their exchange-ratio which is not so easy to fluctuate as exchange-value. Dilating upon the first conclusion, this paper comes to the second conclusion that a commodity owner has two different kinds of request in exchange-process. One kind of request is, not to mention, to get other commodity whose use-value he desires. Another is to estimate value of whole stock of his own commodities and preserve them. But if so, we cannot accept the Marx's thesis that price in gold is the highest developed value-form. If value has the fixed permissible range of exchange-value during some term, single price in gold is not enough for it. It inevitably demands prices at plural points in time which are not necessarily even with each other but share the same range of price. And it is also inevitable for a commodity owner to repeat comparing plural prices (ex. prices at the beginning and the end of a term) of his own commodity with each other. These conclusions give us the perspective that commodity-value (not money) has already some moment of transformation into capital and that the compatibility of credit price with cash price stems from commodity-value.

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Does Service Labor create the Value of Commodities? According to previous arguments, to answer this question, we must examine whether Service Commodity itself contains the Value, or not. But from my point of view, the thing that gives the Value to Commodity is the Subject of Labor which embodies human labor. Commodity has two different concepts of the Value. One derives from the Commodity which embodies human labor or labor value, and the other results from Commodity Price being determined by labor value. Since human labor is not embodied in Service Commodity itself but in Subject of Labor, Service Commodity correlates with the latter concept of the Value. This paper analyzes the unique features of Service Commodity, and presents a case for Value Creativity of Service Labor. In transaction of Service Commodity, it is Labor Process which is dealt with. And it has a property which realizes a Useful Effect of Service Commodity as satisfying customer's wants. So when we analyze Service Commodity, we have to define the unit of Service Commodity that is certain period of Labor Process, through which its Useful Effect is realized. But this unit varies according tc different qualities of Subject of Labor and/or different situations in which Service Labor is implemented, and/or different desires of Service Customers. Therefore, useful effect its self can not be priced in market place before some of these conditions are defined, so it can not be purchased and sold. In reality, Service Provider assumes certain period of times of Labor Process as one unit of certain Service Commodity, presenting its standard price to market, and contracts on the base of the price. Because Service Commodity, like other Commodity, has its use value and value, it takes a Value Form, by which Commodity Value is expressed, and sale of Commodity realize its Value. However, Service Commodity differs from others in the following aspect. After a conclusion of sales contract, when a seller and buyer/customer enter into a process of Service Provision, they recognize the characteristics of Subject of Service Labor, customers wants, and the concrete content of Service Labor those characteristics are reflected. And sometimes in case of necessity, the volume and quality of Service Labor supposed to be provided are modified. Thus, Commodity Value can be modified. Therefore Service Commodity dose not contain its Value, and the Value is not determined before the implementation of Labor Process. Because it correlates with the reality of Labor Process. In transaction of Service Commodity, sales of Labor Process are implemented, where the value that embodied in Commodity has already disappeared, and therefore price of Service Commodity is determined by its value through the reality of Labor Process. Thus, those characteristics of Service Commodities reflect the properties of Service Labor in the shape of Value Creativity and Uncertainty.

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