We project the impact of demographic change on Japanese capital flows by simulating the impact of population aging on Japanese saving and investment rates. As aging depresses saving rates, in our baseline projections, we show that by 2015, foreign capital inflows will comprise about 15 percent...

Japan's deteriorating fiscal situation has attracted international attention. I assess what current Japanese government policies mean for the future of public debt and the economy in general, given the inevitable aging of the population. I review how Japan got into this current fiscal mess, and...

We use a forty-two country model of production and trade to assess the implications of eliminating current account imbalances for relative wages, relative GDP's, real wages, and real absorption. How much relative GDP's need to change depends on flexibility of two forms: factor mobility and the...

We incorporate trade imbalances into a quantitative model of bilateral trade in manufactures, dividing the world into forty countries. Fitting the model to 2004 data on GDP and bilateral trade we calculate how relative wages, real wages, and welfare would differ in a counterfactual world with...

A model of the domestic financial intermediation of foreign capital inflows based on agency costs is developed for studying financial crises in emerging markets. In equilibrium for the model economy, the banking system becomes progressively more fragile under imperfect prudential regulation and...

We use Japanese prefectural wage and land price data to estimate the magnitude of agglomeration effects in manufacturing and finance. We also examine the range of agglomeration effects by estimating the extent to which they diminish with distance, using a specification that encompasses the polar...

Compared to the U.S. national accounts, the Japanese accounts understate consumption and government spending, and therefore overstate the national saving rate. Recently, Hayashi has recalculated Japan's national saving according to the American Department of Commerce definition and found that...

This paper assesses the economic conditions for Asian countries to cope with the formation of EU and NAFTA. Is it desirable for them to form their own trading area? And, if desirable, is it better to have a closed one like the EAEC or a more open one like the APEC? Relying on public economics...

This paper attempts to integrate the theory of trade with that of capital movements, and to study the two country world where each nation has a different rate of time preference. It resolves the indeterminacy problem intrinsic in the Heckscher-Ohlin model where trade and factor movements coexist...

Conventionally economic growth theory was based on the assumption of a constant rate of time preference. Uzawa (1968) and Obstfeld (~, 1981) introduced the rate of time preference that increases with the utility level. Irving Fisher (The Theory of Interest) has a different opinion, however, that...