Japan's Foreign Direct Investment and Structural Changes in Japanese and East Asian Trade

In this paper, we analyze both the impact of Japan's foreign direct investment (FDI) into East Asia on trade and the structural changes in trade that have occurred in the region. To do this, we estimate gravity equations using trade data disaggregated to the industry and product levels. Our analysis shows that the impact of FDI on trade varies by industry. Specifically, in the electrical machinery sector, the positive impact of FDI on trade increased substantially from the 1990s, when the division of labor was advancing rapidly, especially for IT- related products. In the textile industry, which experienced a moderate increase in the division of labor primarily for intermediates, the impact of FDI on trade was positive, although not as great as seen in the electrical machinery industry. On the other hand, in the transportation machinery industry, where production processes were shifted from Japan to other East Asian countries and where Japan's exports were substituted with local production, FDI had virtually no impact on trade.

Optimal monetary policy with skill shock

da Costa and Werning (2005) prove that the Friedman rule of setting nominal interest rate to zero is locally optimal in a monetary model where each consumer receives a privately observed skill shock and the government uses incentive compatible non-linear income taxation. In this paper, we show that when goods and money are strictly separable from labor in the consumer's utility function, the Friedman rule is the globally optimal monetary policy. Positive nominal interest rate does not improve social welfare.Friedman rule

Excitation of Low-Frequency QPOs in Black Hole Accretion Flows

We present the results of global three dimensional magneto-hydrodynamic simulations of black hole accretion flows. We focus on the dependence of numerical results on the gas temperature Tout supplied from the outer region. General relativistic effects are taken into account using the pseudo-Newtonian potential. We ignore the radiative cooling of the accreting gas. The initial state is a torus whose density maximum is at 35rs or 50rs from the gravitating center, where rs is the Schwarzschild radius. The torus is initially threaded by a weak azimuthal magnetic field. We found that mass accretion rate and the mass outflow rate strongly depend on the temperature of the initial torus. The ratio of the average Maxwell stress generated by the magneto-rotational instability (MRI) to gas pressure is alpha ~0.05 in the hot torus and alpha ~ 0.01 in the cool torus. In the cool model, a constant angular momentum inner torus is formed around 4-8rs. This inner torus deforms itself from a circle to a crescent quasi-periodically. During this deformation, the mass accretion rate, the magnetic energy and the Maxwell stress increase. As the magnetic energy is released, the inner torus returns to a circular shape and starts the next cycle. Power spectral density (PSD) of the time variation of the mass accretion rate in the cool model has a low frequency peak around 10Hz when we assumed a 10 solar mass black hole. The PSD of the hot model is flat in 1-30Hz. The slope of the PSD in the cool model is steeper than that in the hot model in 30-100Hz. The mass outflow rate in the low temperature model also shows quasi-periodic oscillation. Intermittent outflows are created in both models. The outflow speed is $0.01c - 0.05c$.Comment: 22 pages, 17 figures, accepted for publication in PASJ (PASJ,60,pp.613-626). Replaced to high resolution versio

Radiative Spectra from Disk Corona and Inner Hot Flow in Black Hole X-ray Binaries

To understand the origin of hard X-ray emissions from black hole X-ray binaries during their low/hard states, we calculate the X-ray spectra of black-hole accretion flow for the following three configurations of hot and cool media: (a) an inner hot flow and a cool outer disk (inner hot flow model), (b) a cool disk sandwiched by disk coronae (disk corona model), and (c) the combination of those two (hybrid model). The basic features we require for successful models are (i) significant hard X-ray emission whose luminosity exceeds that of soft X-rays, (ii) high hard X-ray luminosities in the range of (0.4 - 30) times 10^{37} erg s^{-1}, and (iii) the existence of two power-law components in the hard X-ray band with the photon indices of Gamma_s ~ 2 > Gamma_h, where Gamma_s and Gamma_h are the photon indices of the softer (<10 keV) and the harder (>10 keV) power-law components, respectively. Contribution by non-thermal electrons nor time-dependent evolution are not considered. We find that Models (a) and (b) can be ruled out, since the spectra are always dominated by the soft component, and since only one power-law component, at most, can be reproduced. Only Model (c) can account for sufficiently strong hard X-ray emissions, as well as the existence of the two power-law components, for a large ratio of the accretion rate in the corona to that in the thin disk. The outer disk corona (where the Compton y-parameter is smaller, y < 1) produces the softer power-law component with photon index of Gamma_s ~ 2, whereas the inner hot flow (where y gtrsim 1) generates the harder component with Gamma_h < 2. This model can also account for the observed relationship between the photon index and the reflection fraction.Comment: 13 pages, 13 figures, accepted for publication in PAS

CP Violation via ρω\rho \omega Interference

We consider $B^{\pm,0} \to \rho^0(\omega)h^{\pm,0}$, where $\rho^0(\omega)$ decays to $\pi^+\pi^-$ and $h$ is any hadronic final state, such as $\pi$ or $K$. We find a large direct CP asymmetry in B-meson decays via $\rho \omega$ interference. A possible method to determine weak phases, such as $\phi_{2,3}$, is discussed. The experimental feasibility is also shown.Comment: 7 pages, latex(sprocl.sty included), 2 figures. Talk presented at "Int. Conf. on B-physics and CP violation" Hawaii 9

The Effectiveness of Forecasting Methods Using Multiple Information Variables

This paper examines the effectiveness of forecasting methods using multiple information variables in forecasting the rate of changes in the consumer price index (CPI) and real GDP in Japan, and investigates the background of forecast performance improvement and its limitations. We first examine the performance of forecasts that use individual information variables as well as forecasts that use multiple information variables. The results show that no single variable improves forecasts in all periods for either CPI or GDP, but combining the information from individual forecasts can lead to a stable forecast performance. Next, to explore the backdrop to these improvements in forecast performance, we decompose and analyze the forecast error of forecast combinations using a simple mean. We discover that the irregular movements of forecast errors generally cancel each other out, which in turn leads to a reduction in errors. At the same time, the effect of reducing forecast errors rapidly diminishes with the addition of variables, and we verify that forecast performance stops improving after two to four variables are added. For this reason, it is necessary to consider both the performance of original forecast series that comprise the combination, and the combination of variables that best reduces the correlation among forecast error series to obtain the optimal combination of series.