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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

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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

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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