The standard Walrasian equilibrium theory requires that the marginal value product of production factor such as labor is equal across firms and industries. However, productivity dispersion is widely observed in the real economy. Search theory allegedly fills this gap by encompassing apparent...

Using a simple stochastic growth model, this paper demonstrates that the coefficient of variation of aggregate output or GDP does not necessarily go to zero even if the number of sectors or economic agents goes to infinity. This phenomenon known as non-self-averaging implies that even if the...

The global trend towards tighten regulation of financial institutions and the adoption of International Financial Reporting Standards (IFRS) may hasten the unwinding of cross-shareholdings in Japan, and there are signs that this is already happening. Finding buyers for such shares is therefore a...

We apply a complex Hilbert principal component analysis (CHPCA) to a set of Japanese economic data collected over the last 32 years, comprising individual price indices of middle classification level (imported goods, producer goods, consumption goods and services), Indices of Business Conditions...

Many Japanese firms have operations in Asia, and Thailand, which ranks second behind China in the number of overseas subsidiaries of Japanese firms it hosts, is an important location for manufacturing and products/service distribution. Following the Asian financial crisis of 1997, Thailand has...

Corporate investment is the most important factor to explain the long stagnation of Japan during the 1990's. Using the Bank of Japan diffusion indices of real profitability' and banks' willingness to lend', we estimate investment functions for four groups of firms: large/small and...

Interactions of micro prices with leads and lags play significant role in explaining the behavior of aggregate price index. Thus, for understanding inflation and deflation, it is essential to explore the mechanism of interactions of micro prices. Based on a new method, we show that irrespective...

Interactions of micro prices with leads and lags play significant role in explaining the behavior of aggregate price index. We present a new method of exploring the nature of such interactions of micro prices. For Japan's data, we identify two macro shocks, one external and the other domestic,...

Low inflation was once a welcome to both policy makers and the public. However, Japan’s experience during the 1990’s changed the consensus view on price of economists and central banks around the world. Facing deflation and zero interest bound at the same time, Bank of Japan had difficulty...

There have been numerous cross-border M&A deals involving transnational firms over the last 10 years, in many cases large deals involving European and/or US firms. Japanese firms see the need to expand their overseas presence in response to their low profitability, the maturation of the domestic...