Governance of the Management of Public Debt in Japan

This paper deals with the issue of Japans public debt, particularly from a governance perspective. Japans public debt continues to follow a rising path mainly due to the fact that, in the harsh economic climate the country has experienced since the 1990s, the government has ended up increasing public sector spending in order to support the Japanese economy. Yet when we look back over these events, this is not the only problem; there are also concerns over whether the system has the rules and institutions necessary to deal with such a situation. Even if temporary measures are taken to alleviate a particular burden, there is no guarantee that financial discipline can be maintained in the long term if there are weaknesses in the system of governance. There are problems first of all not only with public debt management, but also with the regulations which apply to government actions themselves. Since public debt obligation is one of the governments concerns, the roots of any problems with governance are to be found within faults in regulations relating to the government itself. Recent New institutional economics has been fruitful in analyzing the governments internal organizational structure and identifying its characteristic lack of commitment. Using these concepts to look at Japans situation, we can see that it is characteristic that both the burden of debt is distributed among a variety of departments and that capital allocation and decision making are determined by mutual relations among those departments. If we were to trace the source of debt repayment capital, we would probably find that the burden is borne in the last resort by general accounting. It cannot be denied that such a system could lead to a weakening of commitment to repayment on the part of the department using the funds. Furthermore, a system in which a number of different departments are involved in decision making would lead to characteristic problems with governance. The basic policy for dealing with possible failure in governance with regard to public debt is to ensure there is a correspondence between authority and responsibility. Specifically, where you have the authority to incur debts, you have the responsibility to pay off those debts, and where repayment proves difficult, this also remains your responsibility. Where there is a possibility that full responsibility cannot be taken, then part of the authority should perhaps be returned to central government. This paper will consider corporate default legislation as a means of dealing with the former question, and the possibility of general debt management as a means of dealing with the latter.public debt, corporate default legislation, debt management

The Government and the Financial System : an Overview

This paper surveys the relationship between the government and the financial system in Japan, mainly from the viewpoint of financial stocks, to gain an overall perspective and identify where any problems lie. During this decade, it seems that the relationship between the government and the financial system in Japan has changed significantly. The government has generally become more deeply involved in the financial system. As a result it is no exaggeration to say that current Japanese financial system has become a financial system of the government, by the government, for the government. This was for the most part, promoted by the fact that there occurred a huge redistribution of wealth during the realignment process after the bursting of the bubble economy. Considering such circumstances, the aspects of of the government, by the government, and for the government will be surveyed in turn. Furthermore, postal system privatization will be discussed in terms of public debt management. Lastly, reference will be made to the possible problems accompanying the change in trend of investment-savings balances.financial system, government, Japan, Privatization, public debt management

Two-photon interference of multimode two-photon pairs with an unbalanced interferometer

Two-photon interference of multimode two-photon pairs produced by an optical parametric oscillator has been observed for the first time with an unbalanced interferometer. The time correlation between the multimode two photons has a multi-peaked structure. This property of the multimode two-photon state induces two-photon interference depending on delay time. The nonclassicality of this interference is also discussed.Comment: 5 pages, 4 figure

Firm-Level Labor Demand for and Macroeconomic Increases in Non-Regular Workers in Japan

This work has received funding from the European Union’s Horizon 2020 research and innovation programme under the Marie Skłodowska-Curie grant agreement No 645763.The purpose of this study is to account for the increase in non-regular workers, namely, part-time and dispatched workers, in the Japanese economy from the early 2000s. Our contribution is that we use a firm-level panel dataset extracted from an administrative survey and distinguish between the short-run and long-run determinants of non-regular labor demand. Using the estimated parameters of the labor demand function, we decompose the rate of increase in the macroeconomic non-regular worker ratio into determinant factor contributions. Our major results can be summarized as follows. First, the firm-level determinants of the demand for part-time and dispatched workers significantly differ. Second, our results suggest that the non-regular job creation stimulated by the increased female labor supply plays an essential role relative to direct demand-side factors. Third, the microeconomic demand conditions for non-regular labor are widely dispersed among firms. Neither the demand factors examined in this study nor industrial differences can explain this heterogeneity

Regional Financial Soundness and R&D Activities (Japanese)

In order to explore the impact of financial factors on the real economy, many researchers are analyzing the relationship between finance and real economic activity using new theories and approaches. This paper focuses on the relationship between financial soundness and corporate R&D activities on a regional scale. By measuring regional financial performance using data series including periods of financial crisis and recovery (from the end of the 1990s to the middle of the 2000s), this paper statistically examines the correlation with factors such as corporate R&D expenditure. Analysis of the whole sample including large corporations reveals that regional financial soundness and R&D activities have a positive, albeit weak, correlation. However, a stronger correlation is observable if we (i) narrow down the sample to small and medium-sized enterprises (SMEs), which are more strongly affected than large corporations by adverse financial conditions, and (ii) use as an independent variable a common component capturing the trends from multiple banking financial indicators. This holds true even if we take into account the possibility that financial soundness might be endogenous or non-financial elements of the regional economy might have impacts on R&D activities. In addition, the correlation becomes even stronger if we take into account, through a Tobit model, the effect of corporations in the sample not actually performing R&D activities. This paper's empirical findings suggest that regional finance plays an important role in revitalizing regional economies. Policies on a regional scale for stabilizing the financial system would also be meaningful in the development of regional economies.

Firm Dynamics and Changes in Firm Size Distribution: Non-parametric analysis of the effects of technological and other conditions (Japanese)

We present an empirical analysis of changes in firm size distribution (FSD), using micro-data for Japanese firms. Two major viewpoints are adopted for the analysis. One is how FSD changes in response to firm dynamics, namely, firm exit and growth. The other is how economic conditions such as financial constraints and technological conditions influence changes in FSD. Non-parametric analysis reveals that economic constraints have different impacts on FSD, even when there seems to be little effect on the total change of distribution. Relaxing financial constraints or increasing minimum efficient scale (MES) attenuate the changes in FSD through exits, but also enhance changes due to growth. These two effects therefore partially cancel out, reducing the overall impact on FSD. On the other hand, the trade ratio significantly affects FSD, because the effects of exit and growth act in the same direction. The relative impact of exit and growth on FSD also differs depending on firm attributes, such as number of years of operation. This result suggests that further empirical analysis using more comprehensive and multifaceted data is needed for studying the effects of economic conditions, such as financial constraints, on changes in firm size distribution.

Oxidation mechanisms of ZRB2-based ultra high temperature ceramic matrix composites

Ultra-high temperature ceramics (UHTCs) are expected as the materials for the nose cones and leading edges for hypersonic and re-entry vehicles. Zirconium diboride (ZrB2) and its composites are a widely studied class of UHTCs. The oxidation of monolithic ZrB2 forms ZrO2 and B2O3. B2O3 acts as a surface protective layer; however, it evaporates above 1200℃. SiC particles are considered effective additives because the SiO2 formed by the oxidation of SiC protects the unreacted region. Simultaneously, excessive pores are formed under the surface in the SiC particle-dispersed ZrB2 matrix (hereafter denoted ZS) composites in a wide temperature range by the preferential oxidation of SiC (active oxidation of SiC) because solid SiO2 is not formed; instead, gaseous SiO forms by active oxidation because of the low oxygen partial pressure relative to that of the surface. The pore-rich porous layer is denoted the “SiC-depleted layer”. The SiC-depleted layer leads to spallation and delamination of the oxidized regions on the surface because strength and stiffness of this layer are quite low. Thus, excessive pore formation in ZS composites should be prevented to improve the oxidation resistance. The objective of this study is to understand oxidation mechanisms of ZrB2-based composites and to propose the way to prevent the formation of SiC-depleted layer in ZS composites. In the present study, we fabricated monolithic ZrB2, ZS, and ZrB2-SiC-ZrC (ZSZ) ternary composites by spark plasma sintering (SPS) technique. In addition, carbon fiber-reinforced ZSZ matrix (C/ZSZ) composites was also fabricated by Si melt infiltration (MI) process. Oxidation resistance of monolithic ZrB2, ZS, ZSZ, and C/ZSZ have specially designed fast heating system in order to characterize oxidation resistance above 2000℃. Please click Additional Files below to see the full abstract