Economic Fluctuations in Japan during the Interwar Period: Re- Estimation of the LTES Personal Consumption Expenditures

To date, most research on interwar period economic fluctuations in Japan has been based on Estimates of Long-Term Economic Statistics of Japan since 1868 (LTES), edited by Kazushi Ohkawa et al. Regardless, the LTES data are just one set of estimations. They require scrutiny, especially for the measurement of personal consumption, which has a high weight in the gross national expenditure. This paper re- estimates the LTES personal consumption expenditures by adjusting the estimation methods for certain expense categories and deducting imputations (which may have a large measurement error), and then calculates real GDP (adjusted real GDP) focusing on the market economy. The re-estimation presents no major changes from the LTES in the shape of the economic fluctuations of the 1920s, when the Japanese economy continuously posted gunbalanced growth.h From the Showa Depression forward, however, while the LTES shows continued positive real GDP growth, the re-estimation indicates negative growth in adjusted real GDP in 1931. These findings remain robust after considering the bias from the deflator formula. Given the characteristics of the national accounts and the measurement error, these re-estimation results suggest that the severity of the Showa Depression may have been underestimated in the prior research.Japanese economy; Interwar period; Showa Depression; Great Depression; Personal consumption; National accounts; Deflator; Imputation

Economic Fluctuations in Japan during the Interwar Period -- Re- estimations of the LTES Personal

To date, most research on Interwar Period economic fluctuations in Japan has been based on Estimates of Long-term Economic Statistics of Japan (LTES), edited by Kazushi Ohkawa et al. Regardless, the LTES data are just one set of estimations. They require scrutiny, especially for the measurement of personal consumption, which has a high weight in GNE. This paper re-estimates the LTES personal consumption expenditures by adjusting the estimation methods for certain expense categories and deducting imputations (which may have a large measurement error), and then calculates real GDP (adjusted real GDP) focusing on the market economy. The re-estimation presents no major changes from the LTES in the shape of the economic fluctuations of the 1920s, when the Japanese economy continuously posted gunbalanced growth.h From the Showa Depression forward, however, while the LTES shows continued positive real GDP growth, the re-estimation indicates negative growth in adjusted real GDP in 1931. These findings remain robust after considering the bias from the deflator formula. Given the characteristics of national accounts and the measurement error, these re-estimation results suggest that the severity of the Showa Depression may have been underestimated in the prior research.Japanese Economy, Interwar Period, Showa Depression, Great Depression, Personal Consumption, National Accounts, Deflator, Imputation

An analysis of employee stock options in Japan

Abstract This paper analyzes the current state of non-executive employee stock option (ESO) issuance in Japan from both micro and macro perspectives using firm data issued in 2000. I find firstly that the main determinant of ESO issuance for individual firms is the extent of their corporate flexibility, although other hypotheses may be applicable depending on the industrial sector; and secondly that the impact on the macro economy is still quite small at the aggregate level at present. However, I also find that taking appropriate account of the fair cost of issuing ESOs could have a substantial effect on the currently disclosed profits of individual issuing firms. The moment firms recognize that ESO issuance is no longer a new-fangled practice, it may well become rapidly widespread and, as a result, could distort aggregate corporate profits on a macro basis

The impact of regional railways on travel behaviour and social capital

This paper focuses on the impacts of regional railways on travel behaviour and social capital, and describes quantitative analyses based on our survey research of residents in communities along two regional railways in Austria. The service levels of these two railways have greatly improved in recent years, and this leads to the results that around 50 to 60 percent of respondents reported “changes” in travel behaviour and 30 percent in relationships with others respectively for both railway lines. These numbers are similar to prior research carried out in Japan. Furthermore, according to analyses using logistic regression models, although the results vary between the two railways, it is notable that non- workers like pensioners significantly gave positive replies to “changes” in relationships with others for all the cases. These indicate that the improvement of regional railways has a positive impact on their travel behaviours and the social capital of residents along their lines, and could possibly reduce the risk of social exclusion of non-workers in regional areas

The value of local railways: an approach using CVM

In Japan, many local railway lines in regional areas are on the brink of closure due to accumulated deficits. Although railways are generally said to have their own option and non-use values compared with buses, conventional cost benefit analysis does not evaluate these values sufficiently because there have been few quantitative research studies into this issue. This paper, focusing on three different Japanese local railways, estimates railways’ additional value over buses using CVM. The CVM here is to estimate not an absolute total economic value of a specific railway but a relative value of railway to replacement buses. Therefore, our survey research has the advantage that data obtained from different railways can be compared and generalized to a certain extent. The results show that two of three cases have their own additional value over buses of around twenty percent, and the other one has additional value of around ten percent. There is no big difference in evaluation between direct users and non-users at present. Also, the survey shows that, if train frequency increases, a certain number of residents, including potential users, are willing to pay more than the current fares.Institute of Transport and Logistics Studies. Faculty of Economics and Business. The University of Sydne

An analysis of employee stock options in Japan

Abstract This paper analyzes the current state of non-executive employee stock option (ESO) issuance in Japan from both micro and macro perspectives using firm data issued in 2000. I find firstly that the main determinant of ESO issuance for individual firms is the extent of their corporate flexibility, although other hypotheses may be applicable depending on the industrial sector; and secondly that the impact on the macro economy is still quite small at the aggregate level at present. However, I also find that taking appropriate account of the fair cost of issuing ESOs could have a substantial effect on the currently disclosed profits of individual issuing firms. The moment firms recognize that ESO issuance is no longer a new-fangled practice, it may well become rapidly widespread and, as a result, could distort aggregate corporate profits on a macro basis

Social capital and local public transportation in Japan

Local public transportation except in metropolitan areas in Japan faces operating difficulties due to business deficits. In recent years, central and local governments have taken social benefits into account to support local public transportation, but social benefits calculated in their cost-benefit analyses seem to be insufficient to evaluate them. Especially since the great earthquake in 2011, Japanese people have begun to rethink the importance of network and trust in neighborhoods, which can be called as ‘social capital,’ based on mobility. Therefore, focusing on ‘social capital,’ this paper tries to find the role of local public transportation beyond social benefits. Specifically, it makes an empirical analysis on the relationship between the indexes of ‘social capital’ and local bus services using cross section data. As a result, network and participation indexes standing for ‘social capital’ in each prefecture positively correlate with the level of local bus services. Also, according to our survey research in Toyama, introduction of a new LRT line is likely to have considerably changed the activities of residents along the line and has tended to promote more opportunities to come into contact with others than before. Those studies shed light on the role of public transportation from the standpoint of ‘social capital.