We developed a dynamic spatial computable general equilibrium （CGE） model to investigate the regional economic impact of earthquakes. The model, representing a decentralized economy with utility-maximizing consumers and value-maximizing firms in a dynamic context, embodies both the spatial interactions among regions and the dynamics of regional investments. In this numerical simulation model, representing an inter-regional inter-sectoral economy, Japan is subdivided into 47 regions, all of which are connected by transportation networks. The model is calibrated for the regional economy in Japan.
In the model, the world is subdivided into regions, throughout which are general industries, transportation industries and households. The economy is endowed with the primary factors of labor and capital. Labor is mobile across industries but not regions, and capital is immobile across industries and regions. Goods and factor prices are determined in perfectly competitive regional markets. The commodity trade between regions in a country generates demand for transportation services, and unit transportation costs are endogenous. Commodities are perfect substitutes （i.e., trade between regions is calculated by means of trade coefficients）. The movement of commodities among regions is enabled by road, rail, sea and air transportation networks, and the modal share is stipulated. The model is solved for a rational expectation equilibrium with assumptions of perfect competition and foresight. However, we assume that firms place priority on the investment-savings balance, so the level of investment is determined by a firm’s optimizing behavior.
In this paper, the economic impact of large-scale earthquakes is evaluated using our dynamic spatial CGE model. A steady-state solution is derived as a base case. Through numerical simulations, the economic impact of earthquakes in the Nankai Trough Region and Tokyo Metropolitan Area are assessed using hypothetical scenarios. Two cases （i.e., unpredicted and predicted occurrences） are assumed, and the respective solutions, characterized as non-steady state, are compared with the base case. We estimated the dynamic and spatial impacts, that is, the industrial investments and commodity flow between regions before and after the earthquakes. The results confirmed the importance of investments aimed at protecting the regional economy in the event of an earthquake disaster.

JEL Classifications: Q54, R11, R13, R15

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In this paper, we construct a simple overlapping generations model with two regions and interregional migration to examine problems related to dynamic agglomeration economies. The existence of agglomeration economies is well established （Krugman 1991, Fujita et al. 1999）. Assuming Marshallian externalities, productivity in one region increases with population in that area. Therefore, an income difference between a core and a peripheral area diverges when people move from the periphery to the core area. We assume that households receive utility from the number of children and from consumption. Generally speaking, urbanization increases the costs of having children. Agglomeration has two diverse effects on household utility. On the one hand, it increases productivity, wage income, and consumption, which are positive effects of agglomeration. On the other hand, urbanization negatively affects the number of children and labor supply （because people use more time to raise children in cities）. If these negative effects exceed the positive ones, then people do not agglomerate in the city. Two symmetric cities exist in equilibrium. If positive effects predominate, then people concentrate in metropolitan areas. Our main conclusions are as follows. First, the types of equilibrium become the determinants of important variables in the steady state. Capital stock, population, number of cities, and GDP is higher in cases of symmetric equilibrium. Second, the types of equilibrium do not affect the level of the capital-labor ratio and per capita GDP in the steady state. Third, along the transitional dynamics, the level of households’ utility is higher in the symmetric equilibrium.

JEL Classification:O18, O40, R11, J13

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The Thai government operates a lending programme for low-income farmers, called the rice mortgage scheme. Originally, farmers without collateral used this scheme to raise a small amount of money for urgent payment in exchange for their harvested rice as collateral. The scheme also served to guarantee the lowest paddy prices and stabilise market prices, because it helped adjust excess demand and supply. However, the Yingluck government in 2011 set the loan amount per unit of paddy higher than the market prices with the aim to improve the income level of farmers, many of whom were low-income earners. The government’s decision to maintain a high loan amount （price） encouraged the farmers to sell their rice to the government instead in the markets, with the knowledge that they could earn more.
This strategy has led to the rice markets being monopolised by the government as the supplier, because the government buys all the rice from the farmers at exorbitant prices. Consequently, although the farmers’ income levels may have improved in a macroeconomic sense, the scheme faces much criticism, because it may worsen rather than improve the social welfare of Thailand and its farmers.
This paper aims to empirically examine the effect of setting a higher price for rice to reach income inequality in Thailand by deriving a model to measure the Gini coefficients. The findings suggest that the Yingluck government strategy of setting higher prices worsens the Gini coefficients for the farmer groups and society as a whole. The model also calculates the impact of possible amendments to the strategy for improving income inequality. The criticisms mentioned above include a huge fiscal burden, smaller benefit provision to farmers, and low-income farmer inaccessibility to the scheme. Resolving the problems of fiscal burden and low-income farmer accessibility to the scheme can improve the Gini coefficients. However, a direct rich-to-poor income redistribution policy would be far more efficient in alleviating income inequality. Therefore, the rice mortgage scheme should abandon its role for improving income inequality and focus on emergency lending for farmers while supporting and stabilising rice prices.

JEL Classifications: H20, I38, Q12, Q13, Q18

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Rice productivity tends to become similar among neighboring regions because of spillover effects, but few previous studies considered such spatial dependence in Japanese rice production. Measuring such spatial influences is important for policy making. This study analyzed the socio-economic and climate factors for rice total factor productivity （TFP） by considering spatial dependence caused by technological spillover and other latent factors.
Results of the spatial auto-regressive （SAR） model and spatial error model （SEM） showed the following. First, effects of spatial dependence in rice TFP level remained even when climate factors, which affect TFP in broader regions than prefectural areas, were controlled. Hence, some biases occur in ordinary least square estimations commonly used in the panel data analysis. Second, the elasticity of TFP with respect to temperature via rice yield was positive until 2000 in most prefectures where summer temperatures were under the threshold level to cause changes in yield. The elasticity of TFP was high and remained positive until the 2050’s in northern Japan. However, in middle and western regions and Kyushu, the elasticity was predicted to become negative after 2030. The same tendency was found in TFP elasticity for effects of temperature on rice quality. The threshold value for temperature in rice quality was lower than rice yield, so an increase in temperature depresses TFP in middle and western regions and Kyushu even under the present situations. Only a few prefectures in northern Japan can achieve an increase in TFP at present. The TFP elasticity against rainfall is constantly negative. Impacts of long rain were stronger than floods. As shown by these tendencies in TFP elasticity, future climate change negatively affects rice TFP via temperature and rain. Third, the ratios of indirect effects from neighboring prefectures by causative factors against total effects on TFP changes, measured by the SAR model, were high in northern Japan where neighbor TFP levels were relatively high. Contrarily, the ratio was low in middle-and-western Japan where neighbor TFP levels were low. Even so, the percentage of indirect effects compared with total effects was approximately 10 to 25% in all regions and throughout all periods.
As such, spatial econometric models are useful to show results without spatial biases. Based on these results, technological development of rice production and provision of precise climate prediction to farmers are important to mitigate the influences of climate change.

JEL Classification:D24, O30, Q11, Q16, R32

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This paper discusses the efficiency of biomass energy management to clarify the impact of local resource management potential （LRMP） for large-scale urban area. When we consider the biomass cycle in the region, it is necessary the area concept including both urban and rural area. In addition, the networks for communities, cities, and regions are required in biomass management. These networks are considered social capital （SC）. In this study, SC was defined as flow of biomass management potential, and unused biomass were defined as stock of biomass management potential. Three kinds of biomass energy;agricultural and livestock biomass energy, forestry biomass and waste energy, were targeted. The size of 47 urban areas including rural area, Japan was estimated. Moreover, Data Envelopment Analysis （DEA） was used to analyze the efficiency of biomass energy management. Input data was the management factor including LRMP, and output data was the supply level of biomass energy. As a result, it was measured that the efficiency of biomass energy management was improved by the flow potential, and this improvement effect was greater than using stock potential. Finally, this paper suggested optimum area size and several recommendations of efficient biomass energy management using LRMP.
JEL Classification:Q20, Q40, Q56, R58

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This paper aims to develop a Long-term Macro-Econometric Model for Japanese Economy, so as to clarify the relations between Economic Block and Financial Block. As a result, the influence of Japanese Economy due to the population decreasing trend, and as well as due to various tax reforms, for the coming society, are to be revealed, quantitatively.
The characteristics of this model, can be ascribable to the capability of short-term as well as long-term prediction, with high quality (in the sense of, goodness of fit).

JEL Classification: C30, H30, R15

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This paper studies the impact of the number of fishermen on municipal populations in devastated coastal municipalities of Iwate and Miyagi Prefectures. This impact was estimated by principal component analysis and cluster analysis, and the municipalities were classified by industrial characteristics to determine municipalities with the fishing industry as a key industry. The study then estimated the responses between the number of employees in fisheries and municipal populations of the municipalities and found a positive correlation. The results identified municipalities that require early stage short-term reconstruction plans for fisheries to maintain their municipal population.

JEL Classification: O21, O25, R19

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Based on the new economic geography (NEG) theory, we analyzed the determinants of location choice for Japanese frozen food industry investments in East Asia. A location choice model of Japanese frozen food industries with domestic market potential, supplier access, sufficient raw materials, investment promotion policies of host countries, and traditional factors such as wages and infrastructures as explanatory variables was estimated. First, we estimated the trade equation of Redding and Venables (2004). Therefore, domestic market potential of the country is defined by the relative real GDP of domestic and trade partners including the following two effects, trade costs subjected to time distances between the exporter and the importer, and existence or non-existence of free trade agreements (FTA・EPA) with other countries. Supplier access of the country is also defined by relative food or agricultural goods price of export goods.
In this paper, we focused on the effects of domestic market potential, supplier access of raw materials (agricultural goods) and investment promotion policies. The conditional logistic model, showed that domestic market potential, supplier access of raw materials and investment promotion policies of host countries as well as traditional cost reduction factors such as wages and infrastructures affect the location choice for Japanese frozen food industry investments in East Asia.

JEL Classification: F23, R11, R30

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