Template-Type:ReDIF-Paper 1.0
Author-Name:Yasuhiro Sakai
Author-Name-First:Yasuhiro
Author-Name-Last: Sakai
Author-Email:y-sakai@biwako.shiga-u.ac.jp
Author-Workplace-Name: Faculty of Economics, Shiga University
Title: J.M. Keynes and F.H. Knight : How to Deal with Risk, Probability and Uncertainty
Abstract:The purpose of this paper is to discuss and compare two giants in the history of
economic thought, J.M. Keynes and F.H. Knight, with special reference to risk, probability,
and uncertainty.
It is in 1921 that both of them published apparently published similar books on the economics
of risk and uncertainty. While Knight's contribution on risk and uncertainty is now well recognized,
Keynes's accomplishments on probability and uncertainty have been rather ignored in the shadow of his
most famous book The General Theory of Employment, Interest and Money (1936). This paper aims to focus
on his earlier yet equally important book A Treatise on Probability (1921), and shed a new light on his
outstanding ideas and everlasting influences on his later work including The General Theory. It is really
interesting to see that Keynes's concept of probability and uncertainty can be well compared to Knight's
distinction between a measurable risk and a non-measurable uncertainty.
Length: 28 pages
Creation-Date:2016-03
Revision-Date:
Publication-Status:
File-URL:https://www.econ.shiga-u.ac.jp/risk/DPA15sakai20160315.pdf
File-Format:Application/pdf
File-Function:First version, 2016
Number: 15
Classification-JEL:
Keywords:Keynes, Knight, risk, probability, uncertainty
Handle: RePEc:shg:dpapea:15
Template-Type:ReDIF-Paper 1.0
Author-Name:Yasuhiro Sakai
Author-Name-First:Yasuhiro
Author-Name-Last:Sakai
Author-Email:y-sakai@biwako.shiga-u.ac.jp
Author-Workplace-Name:Faculty of Economics, Shiga University
Title:Information Exchanges among Firms and Their Welfare Implications (Part 1) :
The Dual Relations between the Cournot and Bertrand Models
Abstract:This long series of papers consist of three parts. Part I is concerned
with the basic dual relations between the Cournot and Bertrand models. Part II begins
to deal with the world of risk and uncertainty, with a discussion of the Cournot duopoly
model with a common demand risk as a starting point. It then deals with other types of
duopoly models with a common risk. Part III discusses more complicated problems such as
private risks and oligopoly models. All these three parts taken together aim to carefully
outline and critically evaluate the problem of information exchanges in oligopoly models,
one of the most important topics in contemporary economics.
The true motivation of writing such survey papers is to strive for a synthesis of the
economics of imperfect competition and the economics of imperfect information. The problem
at issue is how and to what extent the information exchanges among firms influence the welfare
of producers, consumers and the whole society. It is seen in the paper that a definite answer
to the problem really depends on the following many factors. (1) The type of competitors
(Cournot-type or Bertrand-type), (2) the nature of risk (a common value or private values;
demand risk or cost risk), (3) the degree and direction of physical and stochastic interdependence
among firms, and (4) the number of firms. If any set of those factors is specified in a given
oligopoly model, the welfare and policy implications may very systematically be derived by way
of their decomposition into the following four effects. That is, (i) own variation effects, (ii)
cross variation effects, (iii) own efficiency effects, and (iv) cross efficiency effect.
In the real world, trade associations may be regarded as typical information exchange mechanisms.
Many welfare implications obtained in the papers will shed a new light to the effectiveness and limitations of those trading groups.
Length:20 pages
Creation-Date:2016-05
Revision-Date:
Publication-Status:
File-URL: https://www.econ.shiga-u.ac.jp/risk/DPA16sakai20160525.pdf
File-Format: Application/pdf
File-Function: First version, 2016
Number:16
Classification-JEL:
Keywords:Information exchange,oligopoly models,welfare implications,trade associations
Handle: RePEc:shg:dpapea:16
Template-Type:ReDIF-Paper 1.0
Author-Name:Yasuhiro Sakai
Author-Name-First:Yasuhiro
Author-Name-Last: Sakai
Author-Email: y-sakai@biwako.shiga-u.ac.jp
Author-Workplace-Name: Faculty of Economics, Shiga University
Title:Information Exchanges among Firms and Their Welfare Implications (Part 2) : Alternative Duopoly Models
with Different Types of Risks
Abstract:The purpose of this paper is to overview and evaluate the problem of information exchanges in oligopoly,
an important topic in contemporary economics. It is intended as a synthesis of the two streams of economic theories,
the economics of imperfect competition and the economics of risk and information.
This long series of papers consist of three parts. The previous paper, which dealt with Part I, discussed the dual
relations between the Cournot and Bertrand duopoly models in the absence of risk.
This paper turns to Part II, focusing on many duopoly models in which a common risk is present. The starting point
of discussion is the Cournot duopoly model with an industry-wide common demand risk. Many other duopoly models such as
the Cournot duopoly with cost risk and the Bertrand duopoly with demand or cost risk are successively discussed. It will
be seen that the existence of various risk factors and the informational exchanges between Cournot or Bertrand firms influence
the welfare implications on consumers and the society in many complicated ways.
The next paper which deals with Part III will be concerned with more complicated problems such as private risks and/or oligopoly models.
Length:30 pages
Creation-Date:2016-05
Revision-Date:
Publication-Status:
File-URL:https://www.econ.shiga-u.ac.jp/risk/DPA17sakai20160525.pdf
File-Format:Application/pdf
File-Function:First version, 2016
Number: 17
Classification-JEL:
Keywords:Duopoly・Cournot,Bertrand,common risk,information exchanges
Handle: RePEc:shg:dpapea:17
Template-Type: ReDIF-Paper 1.0
Author-Name: Yasuhiro Sakai
Author-Name-First: Yasuhiro
Author-Name-Last: Sakai
Author-Email: y-sakai@biwako.shiga-u.ac.jp
Author-Workplace-Name: Faculty of Economics, Shiga University
Title: Information Exchanges among Firms and Their Welfare Implications (Part 3） : Private Risks and Oligopoly Models
Abstract: The long series of papers on the information exchanges among firms and their welfare implications contain three parts, namely Part I, Part II and Part III.
In the previous papers, we already discussed Parts I and II. Part I was concerned with the basic dual relations between the Cournot and Bertrand models.
Part II dealt with the world of risk and uncertainty, focusing on the Cournot duopoly model with a common demand risk as a starting point. It then explored
other types of duopoly models with a common risk.
The purpose of this paper is to discuss more complicated problems such as private risks and oligopoly models. When there exist more than two firms
in an industry, the problem of the information exchange among firms becomes more complicated yet more intriguing. It will be seen that as the number of
"producers as insiders" rises, the possibility of "consumers as outsiders" gaining their welfare is likely to increase. This is certainly the result which may
agree with common sense. Some policy implications of our analysis will also be investigated.
Length: 38 pages
Creation-Date: 2016-05
Revision-Date:
Publication-Status:
File-URL:https://www.econ.shiga-u.ac.jp/risk/DPA18sakai20160525.pdf
File-Format: Application/pdf
File-Function: First version, 2016
Number: 18
Classification-JEL:
Keywords: Duopoly・Cournot,Bertrand,common risk,information exchanges
Handle: RePEc:shg:dpapea:18
Template-Type: ReDIF-Paper 1.0
Author-Name: Yasuhiro Sakai
Author-Name-First: Yasuhiro
Author-Name-Last: Sakai
Author-Email: y-sakai@biwako.shiga-u.ac.jp
Author-Workplace-Name: Faculty of Economics, Shiga University
Title: Liverpool Merchants versus Ohmi Merchants:How and Why They Dealt with Risk and Insurance Differently
Abstract: The purpose of this paper is to intensively discuss and carefully compare the Liverpool Merchants of Britain and the Ohmi merchants of Japan
in a historical perspective. The question of much interest is how and why those two merchants dealt
with risk and insurance differently.
In his later years, J.R. Hicks did a great contribution on the theory of economic history. He paid a special attention to the rise of the market in which
the merchant played as the main actor of the history theater. According to the Hicks doctrine, the
relation between theory and history should not be one-to-one, but rather flexible to a certain degree. Therefore, it would be quite interesting to compare
the Liverpool merchants of Britain and the Ohmi merchants of Japan. It will be seen that they were
engaged in their respective triangular trade, producing their respective socioeconomic systems.
In short, we have to take a pluralistic view in order to fully understand the concept of risk and insurance from the viewpoint of economic history.
Length: 25 pages
Creation-Date: 2016-07
Revision-Date:
Publication-Status:
File-URL: https://www.econ.shiga-u.ac.jp/risk/DPA19sakai20160714.pdf
File-Format: Application/pdf
File-Function: First version, 2016
Number: 19
Classification-JEL:F14・N10・N70
Keywords: Liverpool merchants, Ohmi merchants, risk, insurance, triangular trade
Handle: RePEc:shg:dpapea:19
Template-Type: ReDIF-Paper 1.0
Author-Name:Atsumasa Kondo
Author-Name-First: Atsumasa
Author-Name-Last: Kondo
Author-Email:a-kondo@biwako.shiga-u.ac.jp
Author-Workplace-Name: Faculty of Economics, Shiga University
Title: Interconnection of Fiscal Policies on Sustainability of Public Debt
Abstract:This paper investigates the interconnection between certain fiscal policies in achieving a sustainable level of public debt. The fiscal policies that are investigated relate to the consumption tax rate, the income tax rate, and to
public spending. The paper focuses on the critical level of public debt-to-GDP ratio, for which if the ratio exceeds this level at time 0, then it diverges to +∞ as time passes. The paper theoretically examines how the critical
level depends on the fiscal policies, and reveals some merits of consumption taxation. As the consumption tax rate increases, so income taxation and cutting public spending become more effective in sustaining public debt.
Length:19 pages
Creation-Date:2016-09
Revision-Date:
Publication-Status:
File-URL:https://www.econ.shiga-u.ac.jp/risk/DPA20Kondo20160912.pdf
File-Format: Application/pdf
File-Function: First version, 2016
Number: 20
Classification-JEL: E62, H6
Keywords: sustainability of public debt, fiscal policies, consumption tax, income tax, public spending, balanced growth path
Handle: RePEc:shg:dpapea:20
Template-Type: ReDIF-Paper 1.0
Author-Name: Atsumasa Kondo
Author-Name-First: Atsumasa
Author-Name-Last: Kondo
Author-Email:a-kondo@biwako.shiga-u.ac.jp
Author-Workplace-Name: Faculty of Economics, Shiga University
Title: Sustainability of Public Debt in an AK Model with Complex Tax System
Abstract:This paper theoretically investigates the role of the tax system in sustaining the public debt. The paper explicitly
derives the critical level of the public debt-to-GDP ratio that is compatible with a balanced growth path. If the
ratio exceeds this critical level at time 0, then it diverges to +∞ as time passes. Analyzing a situation where the government marginally increases
the consumption tax rate, the paper reveals the extent to which the government
can then cut the income tax rate while maintaining the sustainability of public debt. Tax rates that are compatible with the balanced growth are also derived as a function of the initial level of debt-to-GDP ratio.
Length: 22 pages
Creation-Date: 2016-09
Revision-Date:
Publication-Status:
File-URL:https://www.econ.shiga-u.ac.jp/risk/DPA21kondo20160930.pdf
File-Format: Application/pdf
File-Function: First version, 2016
Number: 21
Classification-JEL: E62, H6
Keywords: sustainability of public debt, tax system, balanced growth path, dynamic general equilibrium
Handle: RePEc:shg:dpapea:21
Template-Type: ReDIF-Paper 1.0
Author-Name: Yasuhiro Sakai
Author-Name-First: Yasuhiro
Author-Name-Last: Sakai
Author-Email: y-sakai@biwako.shiga-u.ac.jp
Author-Workplace-Name: Faculty of Economics, Shiga University
Title:Frank H. Knight on Market Thinking:Reflections on the Logic and Ethics of the Capitalist Economy
Abstract:The purpose of this paper is to shed a new light on the working and performance of the market economy from
a pluralistic viewpoint. To this end, we first pay attention to the general equilibrium theory a la L.W. McKenzie, K. J. Arrow
and G. Debreu. Whereas this theory seems to be established on the foundation of solid logic and advanced mathematics,
the existence of special ethics and ideology behind the scenes should not be forgotten. We next reexamine the thought
of Frank H. Knight, who has raised an strong objection against glorification of the market economy.
In the late 1960s, I was a graduate student at the University of Rochester. I still recall the touching moment when
Professor McKenzie, finally succeeding after a long struggle to prove the existence of a competitive economy by help
of a mathematical theorem of fixed point, posed a bit in a class and said quietly, "It' so beautiful! ". The world was then
in the midst of Cold War and divided into the two powerful blocs, the socialist bloc dominated by the Soviet Union and
the capitalist block led by the United States of America. McKenzie's complacent whispering sounded like the victory
declaration of capitalism over socialism.
Around 40 years have passed since then. It seems that the "academic Cold War" between Marxian economics
and modern economics is now over. At the same time, the ethics and ideology of general equilibrium looks surely
fading away although it is not completely vanished. It is our regret, however, the new, synthetic social science which can
replace the existing dogmatic doctrines are not in sight yet. A completely new approach like a second Knight or a second Keynes would urgently be needed.
Length: 28 pages
Creation-Date: 2016-12
Revision-Date:
Publication-Status:
File-URL:https://www.econ.shiga-u.ac.jp/risk/DPA22Sakai20161216.pdf
File-Format: Application/pdf
File-Function: First version, 2016
Number: 22
Classification-
Keywords:Knight, market thinking, general equilibrium, ethics, ideology
Handle: RePEc:shg:dpapea:22
Template-Type: ReDIF-Paper 1.0
Author-Name: Yasuhiro Sakai
Author-Name-First: Yasuhiro
Author-Name-Last: Sakai
Author-Email: y-sakai@biwako.shiga-u.ac.jp
Author-Workplace-Name: Faculty of Economics, Shiga University
Title:A Risk Economic Approach to Nuclear Power Generation:From Daniel Bernoulli to Keynes and Knight
Abstract: This paper aims to discuss the problem of nuclear power generation from the viewpoint of the economics
of risk and uncertainty. Although we have experienced the two major nuclear disasters, Chernobyl and Fukushima,
in recent times, it is quite unfortunate that risk-economic studies in nuclear power generation have been extremely rare so far.
This may show intentional neglect in the academic circle. The purpose of this paper is to duly mend such a regrettable tendency.
Before 11 March 2011, there were many people who more or less believed in the myth of absolute safety. The Great East Japan
Earthquake, however, has completely changed their concept of risk for nuclear power generation, thus requiring the need to take a
new risk-economic approach to nuclear energy. As saying goes, we can learn new lessons in old teachings: we have to reexamine the economics of J.M. Keynes and Frank Knight.
There are many possibilities for future research.
Length: 26 pages
Creation-Date: 2017-02
Revision-Date:
Publication-Status:
File-URL:https://www.econ.shiga-u.ac.jp/risk/DPA23Sakai20170217.pdf
File-Format: Application/pdf
File-Function: First version, 2017
Number: 23
Classification-
Keywords:Risk, uncertainty, nuclear power generation, Keynes, Knight
Handle: RePEc:shg:dpapea:23
Template-Type: ReDIF-Paper 1.0
Author-Name: Ryo Izawa
Author-Name-First: Ryo
Author-Name-Last: Izawa
Author-Email: ryo-izawa@biwako.shiga-u.ac.jp
Author-Workplace-Name: Faculty of Economics, Shiga University
Title:Under Political Uncertainties:Organisational Changes in the Imperial Continental Gas Association, 1824?1987
Abstract: This study followed the brief history of a British multinational utility enterprise, Imperial Continental Gas Association (ICGA).
The company passed through successive waves of technological and political shocks throughout its life. In particular, political issues
such as municipalisation, wars, international taxation and nationalisation had a critical impact on its corporate behaviours. Some political
events, such as compulsory liquidation by the German occupation government during the First World War, forced the company to divest its
works. The fear of deprivatisation and international double taxation prompted the company to decentralise its corporate structure, whereby
ICGA gradually shifted from a company with over-centralism to a pure holding company during the first half of the 20th century. Eventually,
the political capabilities nurtured by these experiences contributed to the survival of ICGA for 164 years.
Length: 17 pages
Creation-Date: 2017-05
Revision-Date:
Publication-Status:
File-URL:https://www.econ.shiga-u.ac.jp/risk/DPA24Izawa20170502.pdf
File-Format: Application/pdf
File-Function: First version, 2017
Number: 24
Classification-
Keywords:Risk,Political risk, Political capabilities, Business history, International business, International taxation, Public utility company
Handle: RePEc:shg:dpapea:24
Template-Type: ReDIF-Paper 1.0
Author-Name: Yasuhiro Sakai
Author-Name-First: Yasuhiro
Author-Name-Last:Sakai
Author-Email: y-sakai@biwako.shiga-u.ac.jp
Author-Workplace-Name: Faculty of Economics, Shiga University
Title:Involuntary Unemployment versus "Involuntary Employment" : J.M. Keynes and Beyond
Abstract:This paper is concerned with the important question of how and to what extent great economists such as Keynes,
Knight, Hicks, Samuelson, Takata, and Morishima have been intermingled with each other. Our discussion focuses on the two
key concepts in the labor markets; involuntary unemployment and "involuntary employment." On the one hand, there are so
many persons in the street who are willing to work at the existing wages but cannot find jobs because of a shortage of the effective
demand as a whole. This is clearly the issue of involuntary unemployment, which has been energetically tackled by J. M. Keynes and
his followers since the 1930s.On the other hand, since the 1990s, there also have emerged so many people who must work unwillingly
for their survivals at the minimal level of wages. This is a new issue of "involuntary employment" or "non-regular workers", which has
recently been investigated by Nobuaki Takahashi, a rising Japanese economist. Although the Takahashi approach is an attractive one,
it nevertheless seems to remain at the embryo stage, thus requiring further developments in many ways. The second Keynes would urgently be needed.
Length:26 pages
Creation-Date: 2017-08
Revision-Date:
Publication-Status:
File-URL:https://www.econ.shiga-u.ac.jp/risk/DPA25Sakai20170823.pdf
File-Format: Application/pdf
File-Function: First version, 2017
Number: 25
Classification-JEL:B22, E12, E24
Keywords:Keynes, involuntary unemployment,Takata,sociological factors,non-regular workers,Takahashi, "involuntary employment"
Handle: RePEc:shg:dpapea:25
Template-Type: ReDIF-Paper 1.0
Author-Name:Ryo Izawa
Author-Name-First:Ryo
Author-Name-Last:Izawa
Author-Email:ryo-izawa@biwako.shiga-u.ac.jp
Author-Workplace-Name: Faculty of Economics, Shiga University
Title:Dynamics of the British Multinational Enterprises and International Tax Regulation, 1914?1945
Abstract:This study explores dynamics between formation of a tax system and its adaptation by enterprises over a period of time.
In particular, the study examines the formation process of the British international tax system, focusing on business interest groups'
political activities and British multinational enterprises' behaviour from 1914 to 1945. It is clarified that some business interest groups
highly influenced the British international tax system. Political activities contributed to legislating Dominion Income Tax Relief in 1920
and concluding the UK?US tax treaty in 1945. However, the British government did not always welcome business interest groups' political
activities. Inland Revenue and the Treasury were particularly reluctant to reduce tax revenue. Additionally, the governmental body always
endeavoured to minimise tax relief's scope. In such a tax environment, British multinational enterprises changed corporate structures,
locations, and/or domiciles in some cases. Furthermore, the British overseas engaged in tax planning, identical to contemporary multinationals' tax planning.
Length:16 pages
Creation-Date: 2017-08
Revision-Date:
Publication-Status:
File-URL:https://www.econ.shiga-u.ac.jp/risk/DPA26Izawa20170831.pdf
File-Format: Application/pdf
File-Function: First version, 2017
Number: 26
Classification-JEL:
Keywords:Taxation history, International taxation, Business interest group, International business, Corporate political activity
Handle: RePEc:shg:dpapea:26
Template-Type: ReDIF-Paper 1.0
Author-Name:Hiroshi Sano
Author-Name-First:Hiroshi
Author-Name-Last:Sano
Author-Name:Rei Goto
Author-Name-First:Rei
Author-Name-Last:Goto
Author-Name:Chisato Hamashima
Author-Name-First:Chisato
Author-Name-Last:Hamashima
Author-Email:hi-sano@biwako.shiga-u.ac.jp
Author-Workplace-Name: Faculty of Economics, Shiga University
Title:Does lack of resources impair access to breast and cervical cancer screening in Japan?
Abstract:"Objectives"To assess the impact of the quantity of resources for breast and cervical cancer screening on the participation rates in screening in clinical settings in municipalities, as well as to clarify whether lack of resources impairs access to cancer screening in Japan.
"Methods"Of the 1,746 municipalities in 2010, 1,443 (82.6%) and 1,469 (84.1%) were included in the analyses for breast and cervical cancer screening, respectively. In order to estimate the effects of the number of mammography units and of gynecologists on the participation rates in breast and cervical cancer screening in clinical settings, multiple regression analyses were performed using the interaction term for urban municipalities.
"Results"The average participation rate in screening in clinical settings was 6.01% for breast cancer, and was 8.93% for cervical cancer. The marginal effect of the number of mammography units per 1,000 women was significantly positive in urban municipalities (8.20 percent point). The marginal effect of the number of gynecologists per 1,000 women was significantly positive in all municipalities (2.54 percent point) and rural municipalities (3.68 percent point).
"Conclusions" Lack of mammography units in urban areas and of gynecologists particularly in rural areas impaired access to breast and cervical cancer screening. Strategies are required that quickly improve access for the residents and increase their participation rates in cancer screening.
Length:32 pages
Creation-Date: 2017-09
Revision-Date:
Publication-Status:
File-URL:https://www.econ.shiga-u.ac.jp/risk/DPA27Sano20170914.pdf
File-Format: Application/pdf
File-Function: First version, 2017
Number: 27
Classification-JEL:
Keywords:Breast cancer screening, Cervical cancer screening, Participation rate, Resource; Mammography unit, Gynecologist
Handle: RePEc:shg:dpapea:27
Template-Type: ReDIF-Paper 1.0
Author-Name: Yasuhiro Sakai
Author-Name-First: Yasuhiro
Author-Name-Last:Sakai
Author-Email: y-sakai@biwako.shiga-u.ac.jp
Author-Workplace-Name: Faculty of Economics, Shiga University
Title:On the Economics of Risk and Uncertainty: A Historical Perspective
Abstract:The economics of risk and uncertainty has a long history over 300 years. This paper aims to systematically
summarize and critically reevaluate it, with special reference to John M. Keynes and Frank H. Knight, the two giants in modern times.
In our opinion, there are the six stages of development, with each stage vividly reflecting its historical background. The first stage,
named the Initial Age, corresponds to a long period before 1700, the one in which statistics was firmly established by B. Pascal as a branch
of mathematics but economic theory per se was not well developed. The second stage, called the "B-A" Age, covers the period from 1700
to 1880, is characterized by the two superstars, Daniel Bernoulli and Adam Smith. The third stage from 1880 to 1940 may be named the
"K-K" Age because it was dominated by J.M. Keynes and F.H. Knight. The fourth stage, called the "N-M" age, eyewitnesses the birth of game theory,
with von Neumann and Morgenstern being its foundering fathers. The fifth stage from 1970 to 2000, named the "A-S" Age, is characterized by several
distinguished scholars with their initials "A" or "S". Finally, in 2000 and onward, while many doubts have been raised about existing doctrines, new approaches
have not emerged yet, thus being named the Uncertain Age.
The relationship between Keynes and Knight is both complex and rather strange. It has a history of separating, approaching, separating again and approaching again.
As the saying goes, a new wine should be poured into a new bottle. We would urgently need a Keynes and/or a Knight toward a new horizon of the economics of risk and uncertainty.
Length:26 pages
Creation-Date: 2018-01
Revision-Date:
Publication-Status:
File-URL:https://www.econ.shiga-u.ac.jp/risk/DPA28Sakai20180112.pdf
File-Format: Application/pdf
File-Function: First version, 2018
Number: 28
Classification-JEL:
Keywords:Economics of risk and uncertainty, Bernoulli, Keynes, Knight
Handle: RePEc:shg:dpapea:28
Template-Type: ReDIF-Paper 1.0
Author-Name:Satoshi Honma
Author-Name-First:Satoshi
Author-Name-Last:Honma
Author-Name:Yushi Yoshida
Author-Name-First:Yushi
Author-Name-Last:Yoshida
Author-Email:yushi.yoshida@biwako.shiga-u.ac.jp
Author-Workplace-Name: Faculty of Economics, Shiga University
Title:Convergence in pollution terms of trade
Abstract:By implementing the world input-output tables for 40-countries by 35-industries to account for intermediate trade,
we constructed the pollution terms of trade (PTT) on the basis of CO2 emissions between 1995 and 2009. We examine whether
the PTTs have converged among the 40 countries in the past 15 years. The empirical evidence supports PTT convergence; PTT
growth is negatively related to its initial level, and this empirical result is robust to various control variables.
Length:48 pages
Creation-Date: 2018-03
Revision-Date:
Publication-Status:
File-URL:https://www.econ.shiga-u.ac.jp/risk/DPA29Yoshida20180315.pdf
File-Format: Application/pdf
File-Function: First version, 2018
Number: 48
Classification-JEL:
Keywords:World input-output table,International trade,Pollution haven hypothesis,Pollution terms of trade
Handle: RePEc:shg:dpapea:29
Template-Type: ReDIF-Paper 1.0
Author-Name: Takuma Tanaka
Author-Name-First: Takuma
Author-Name-Last:Tanaka
Author-Email: takuma-tanaka@biwako.shiga-u.ac.jp
Author-Workplace-Name: Faculty of Data Science, Shiga University
Title:Thermodynamic structure of a macroeconomic model
Abstract:This paper reports a novel mathematical structure of economic models with rational agents.
Taking a cash-in-advance (CIA) model as an example, I show that macroscopic conservation
and irreversibility laws, which are similar to those in thermodynamics, hold for the model.
These properties allow for defining internal energy, Helmholtz free energy, entropy, and temperature.
Thermodynamic relations among these quantities are also proven for the model.
Possible extensions to and implications for macroeconomic models are discussed.
Length:23 pages
Creation-Date: 2018-05
Revision-Date:
Publication-Status:
File-URL:https://www.econ.shiga-u.ac.jp/risk/DPA30Tanaka20180510.pdf
File-Format: Application/pdf
File-Function: First version, 2018
Number: 30
Classification-JEL:E37
Keywords:CIA model; land; thermodynamics; irreversibility
Handle: RePEc:shg:dpapea:30
Template-Type: ReDIF-Paper 1.0
Author-Name: Yasuhiro Sakai
Author-Name-First: Yasuhiro
Author-Name-Last:Sakai
Author-Email: y-sakai@biwako.shiga-u.ac.jp
Author-Workplace-Name: Faculty of Economics, Shiga University
Title:Daniel Ellsberg on J.M. Keynes and F.H. Knight:Risk, Ambiguity and Uncertainty
Abstract:This paper aims to focus on the life and work of Daniel Ellsberg, with an intensive discussion on its relation to J.M. Keynes and F.H. Knight, the two great pioneers of the economics of uncertainty.
Ellsberg seems to be a man in paradox. When he was young, he was an outstanding researcher at Harvard University and the RAND Corporation; at the December Meting of the Econometric Society in 1960,
he presented his remarkable paper in which he successfully demonstrated what we may now call Ellsberg's paradox against the traditional expected theory a la Daniel Bernoulli and von Neumann.
Although it was published with the title "Risk, ambiguity and decision" in the November issue of the Quarterly Journal of Economics, it was not paid due attention for a long time.
It was partly because he was so preoccupied in the 1960s and onward by letting the general public know the Pentagon papers that he could virtually have no time left to engage in purely academic activities.
In the 21st century, however, the times have changed in favor of Ellsberg: we can see the dramatic return of interest in decision making under ambiguity.
Chapter Ⅱ will deal with uncertainties that are not risks. A focal point of discussion will be the similarity and difference between Keynes and Knight.
Kenneth Arrow's skepticism about Knight on uncertainty will also be paid due attention. Chapter Ⅲ, the main part of this paper, will turn to the concept of ambiguity that was first introduced by Ellsberg.
The two-color problem and the three color problem will systematically be examined by help of numerical representations. Chapter Ⅳ will tell us many alternative ways to solve the so-called Ellsberg paradox.
Presumably, the Keynesian approach by means of interval-valued probabilities will be shown to be very simple and highly effective. In our opinion, the most amazing Ellsberg paradox lies in the fact that an
accomplished economist specialized in the aversion of risk and uncertainty dared to make a personal choice to risk everything such as degrading his social status and putting him in prison for a long period.
Surely, the intellectual legacy of Ellsberg seems to be an intriguing research in paradox.
Length:21pages
Creation-Date: 2018-06
Revision-Date:
Publication-Status:
File-URL:https://www.econ.shiga-u.ac.jp/risk/DPA31Sakai.pdf
File-Format: Application/pdf
File-Function: First version, 2018
Number: 31
Classification-JEL:B21, B22, D81, E12
Keywords:Ellsberg, Keynes, Knight, risk, ambiguity, uncertainty
Handle: RePEc:shg:dpapea:31
Template-Type: ReDIF-Paper 1.0
Author-Name: Yasuhiro Sakai
Author-Name-First: Yasuhiro
Author-Name-Last:Sakai
Author-Email: y-sakai@biwako.shiga-u.ac.jp
Author-Workplace-Name: Faculty of Economics, Shiga University
Title:Frank H. Knight on Uncertainty and Profit Manager versus Entrepreneur
Abstract: This chapter aims to carefully discuss how Frank H. Knight, the "Grand Old Man" of Chicago, dealt with uncertainty and profit, with special reference to manager versus entrepreneur.
Frankly speaking, Knight was a sort of man in paradox, having a dualistic view and adopting an eclectic approach. In order to shed a new light on his life and work, we first argue that there possibly exist some traces
of the great Knight in the words and deeds of Martin Bronfenbrenner, once one of Knight's students at Chicago. Then we focus on the distinction between risk and uncertainty. According to Knight, non-measurable uncertainty
must radically be different from measurable risk: only uncertainty, but not risk, enables the entrepreneur to acquire true profit as its reward. In contrast to the manager who are doing just routine jobs every day, the entrepreneur dares
to engage in new venturous activities, thus playing the central figure of the capitalist system. We live in the new age of uncertainty. The second Knight is urgently needed.
Length:17pages
Creation-Date: 2018-10
Revision-Date:
Publication-Status:
File-URL:https://www.econ.shiga-u.ac.jp/risk/DPA32sakai.pdf
File-Format: Application/pdf
File-Function: First version, 2018
Number: 32
Classification-JEL:
Keywords:Frank H. Knight, Martin Bronfenbrenner, risk, uncertainty, manager, entrepreneur, profit, capitalist system
Handle: RePEc:shg:dpapea:32
Template-Type: ReDIF-Paper 1.0
Author-Name: Ryo Izawa
Author-Name-First: Ryo
Author-Name-Last:Izawa
Author-Email: ryo-izawai@biwako.shiga-u.ac.jp
Author-Workplace-Name: Faculty of Economics, Shiga University
Title:Corporate Structural Change for Tax Avoidance: British Multinational Enterprises and International Double Taxation between the First and Second World Wars
Abstract: This study demonstrates the actual impact of international double taxation on management of British multinational enterprises between the First and Second
World Wars. In particular, it focused on tracing the process by which tax-minimisation strategy affected corporate-level strategy.
In three cases examined using corporate archival sources, the companies reorganised their corporate legal structure for tax avoidance.
Yet the effects on their management were not uniform. (1). The corporate structural change for tax avoidance of Rio Tinto and Silica Gel Corporation did not alter the extant corporate strategy.
(2). Tax strategy of Imperial Continental Gas Association entailed changing extant corporate strategy. (3). The legal structure of Unilever gradually and unintentionally influenced the extant corporate strategy.
These heterogeneous responses of the firms imply that the institutional pressure of a tax law does not always lead to organisational isomorphism and can affect the corporate-level strategy over time.
Length:25pages
Creation-Date: 2018-11
Revision-Date:
Publication-Status:
File-URL:https://www.econ.shiga-u.ac.jp/risk/DPA33Izawa.pdf
File-Format: Application/pdf
File-Function: First version, 2018
Number: 33
Classification-JEL:
Keywords: international taxation, international business history, institutional theory, international tax system, British multinational enterprises
Handle: RePEc:shg:dpapea:33
Template-Type: ReDIF-Paper 1.0
Author-Name: Yasuhiro Sakai
Author-Name-First: Yasuhiro
Author-Name-Last:Sakai
Author-Email: y-sakai@biwako.shiga-u.ac.jp
Author-Workplace-Name: Faculty of Economics, Shiga University
Title:On the History of Economic Systems:Werner Sombart and J.R. Hicks Compared
Abstract: This paper aims to discuss the relationship between economic theory and market economy from a new angle.
In particular, Werner Sombart and John R. Hicks, two giants in studies of such relationship, will be critically evaluated and carefully compared.
Sombart is now an almost forgotten economic historian, but his work on the role of capitalist spirit played in the three stages of capitalism is
worthy of serious investigation. Hicks is mainly regarded as an important theoretician of general equilibrium and welfare, but his later work on
economic history is also worthy of serious consideration. Hicks pays special attention to the role of merchant in the exchange economy.
By comparing the works of Sombart and Hicks in many ways, we can shed new light on the immortal problem of the relationship between Theory and History.
It is remarkable to see that the Ohmi merchants of Japan are famous traders with strong capitalist spirit a la Sombart.
We can expect to learn new lessons from old teachings.
Length:23pages
Creation-Date:2019-4
Revision-Date:
Publication-Status:
File-URL:https://www.econ.shiga-u.ac.jp/risk/DPA34Sakai.pdf
File-Format: Application/pdf
File-Function: First version, 2019
Number: 34
Classification-JEL:
Keywords:theory and history, W. Sombart, capitalist spirit, J.R. Hicks, exchange economy,Ohmi merchant
Handle: RePEc:shg:dpapea:34
Template-Type: ReDIF-Paper 1.0
Author-Name: Yasuhiro Sakai
Author-Name-First: Yasuhiro
Author-Name-Last:Sakai
Author-Email:y-sakai@biwako.shiga-u.ac.jp
Author-Workplace-Name: Faculty of Economics, Shiga University
Title:From General Equilibrium Theory to the Economics of Uncertainty： A Personal Perspective
Abstract:This note is concerned with the question of why and how my research interest has been changed from general equilibrium theory to the economics of uncertainty. though it is fundamentally a personal perspective, it is expected to have historical implications as well, thus serving as a good guide toward the new horizon of integrated social science. When I was started my research life, the people was involved in the "Cold War" between the capitalist bloc and the socialist bloc. In 1968, to escape from the Japanese university disturbance, I applied for the graduate program at the University of Rochester, with Professor Lionel W. McKenzie being a towering figure. While I took care of the math econ sequence at the University of Pittsburgh, I began to have a feeling of doubt about the practical applicability of general equilibrium theory a la McKenzie. Partly being motivated by a suggestion from Professor Oscar Morgenstern, who came to Pittsburgh for an academic lecture, I began to shift my research area from pure and abstract theories to more practical and applied subjects including the economics of uncertainty. In 1989, all of a sudden, the seemingly invincible Berlin Wall turned down, being followed by the collapse of the mighty
Soviet Union. In the dreadful year of 2008, the world economies was involved in the most serious crisis since the Great Depression on the 1930s. At present, we are living in the "New Age of Uncertainty," hoping for the coming of the second Keynes and/or the second Knight. Thomas Piketty's new book on economic inequality would possibly lead to the promotion of an integrated social science in the new century.
Length:13pages
Creation-Date:2019-6
Revision-Date:
Publication-Status:
File-URL:https://www.econ.shiga-u.ac.jp/risk/DPA35Sakai.pdf
File-Format:Application/pdf
File-Function: First version,2019
Number: 35
Classification-JEL:
Keywords:
Handle: RePEc:shg:dpapea:35
Template-Type: ReDIF-Paper 1.0
Author-Name: Yasuhiro Sakai
Author-Name-First: Yasuhiro
Author-Name-Last:Sakai
Author-Email:y-sakai@biwako.shiga-u.ac.jp
Author-Workplace-Name: Faculty of Economics, Shiga University
Title: The Hicks-Morishima Approach Reconsidered:Another Look at the Interdependence of Several Markets Abstract:This paper aims to shed some new light on the Hicks-Morishima approach to the interdependence of several markets. In spite of its rather simple and ambitious framework for the interdependence of several markets, it is quite unfortunate that this approach has been rather neglected in the academic circle. I suppose that there are several reasons for this. First, the traditional general equilibrium approach developed by Lionel W. McKenjie, Gerald Debreu and Kenetth W. Arrow exclusively works with the good space rather than the price space. In contrast, the Hicks-Morishima approach based on Hicks' classical bookValue and Capital exclusively operates on the price space, thus against the current main stream of economic theory. Next, the majority of economics readers are usually familiar with the straightforward notion of demand and supply curves, but not with the twisted concept of excess demand curves. It is one of my main purpose to mend such unfortunate tendency, presumably proceeding toward the establishment of a new grand system of social science. We can learn new lessons from old teachings. Length:32pages
Creation-Date:2019-10
Revision-Date:
Publication-Status:
File-URL:https://www.econ.shiga-u.ac.jp/risk/DPA36Sakai.pdf
File-Format: Application/pdf
File-Function: First version, 2019
Number: 36
Classification-JEL:B31, C62, D51
Keywords:J.R. Hicks・M. Morishima・Value and Capital・excess demand curves・general equilibrium analysis・comparative statics
Handle: RePEc:shg:dpapea:36