Wednesday, June 06, 2007

Worry About Global Warming

One of the purposes of this blog is to let you know about the modern Japan. So I cite some main Japanese newspapers, since many American bloggers usually the NY times, the Washington Post and WSJ.

Today's excerpt is from the Yomiuri Shimbun, the most popular newspapers in Japan: Seventy-one percent of respondents in a recent Yomiuri Shimbun survey cited global warming as their chief worry regarding changes to the environment.

The Yomiuri Shimbun
The survey also found that 67 percent of respondents said they "want" or were "quite keen" to use bioethanol as automobile fuel.

The survey covered 3,000 eligible voters in interviews at 250 locations nationwide on May 19 and 20. Of them, 1,803 people, or 60.1 percent, responded.

....The latest survey shows that an increasing number of people are worried about global warming and its link to increases in carbon dioxide emissions from the consumption of oil and coal, with changes in the climate being felt in Japan in extreme summer heat and an unusually warm winter.

....Specifically regarding global warming, 72 percent of respondents said they were concerned about the deterioration of the environment due to such phenomena as heat waves, floods and cold snaps, which have become more pronounced in recent years.

Asked if Japan should step up diplomatic pressure on China and the United States, which are the world's largest carbon dioxide emitting nations, 92 percent of respondents said yes.

....On the environmental impact of global warming, 52 percent of respondents cited worries about the deterioration in living environments by decreases in agricultural products due to more frequent regional heavy rain and droughts. Fifty-one percent said they were concerned about rising sea levels, while 41 percent were worried that the fisheries industry would be adversely affected with changes in the marine ecosystem. This was followed by 39 percent who cited concerns about changes in farming areas due to desertification.
(Jun. 6, 2007)


More Japanese are getting interested in the environment issues and the related TV programs often broadcast. It is a good trend, I think. I am also interested in the global warming, especially the economic impacts of it. I'll have a comment on it in this blog later.

By the way, Al Gore's book, "An inconvenient Truth", becomes popular among the Japanese readers. I have not read it yet. If you've read it already, let me know your comments on it.

Saturday, June 02, 2007

ミルウォーキー病

ミルウォーキーでは、特有の感染症があるみたいです。

Friday, June 01, 2007

Will You Marry Me?

I found a good post in my favorite econ blog, Freakonomics Blog. Here's the excerpt:

Every year, as might be expected, the American Wedding Study’s* tally of the amount spent by Americans on getting married increases: from about $22,000 in 2003 to more than $26,000 in 2005 to, in 2006, a grand total of $27,852 …

According to the 2006 study, Americans were spending $14 billion annually on engagement rings, wedding rings, and other items of jewelry. They were purchasing just over $7 billion worth of wedding gowns, tuxedos, flower girl outfits, bridesmaids’ dresses, veils, satin shoes, gloves, stoles, and other items of wedding attire....

It is an interesting fact. Why do they marry? And why do they spend so much money on their wedding? Economists generally reason it: A wedding is a kind of "commitment".

Commitment is the strategic issue that is paid attention to on the games with sequential moves. Sequential moves mean that, for example, if one of the two players in some game moved first the other would make his or her choice by knowing what one player was choosing (or had chosen).

This sort of game is very popular. And the commitment is also very popular among us in our daily life. For example, if you and I walk straight at opposite ends of the street, we both will crash into each other and be injured. And if you or I swerve first, we won't crash.

What should we do in order not to crash into each other? If I forced myself to choose straight, you would choose to swerve, and vice versa. And how do I force myself to do that? For example, I should wear the glasses that enable me to see just only straight and not to see around there. And then you would choose to swerve in the street when you saw me walk to you and wear such glasses.

A wedding is like such a straight-walk game. If I forced myself to choose her, she would choose me as her lifelong partner, and vice versa. And then how do I force myself to do that? For example, I should give her a big, very expensive present like a big, shining diamond ring with the certificate.

Note that this committed choice, a big present for my fiance, must be both irreversible and observable to her; otherwise she couldn't be persuaded to make a big decision(marry me). What is both irreversible and observable to my fiance? This is the question!

The fact that the amount of money spent on wedding is increasing might show us that more men are afraid that their fiances will change their minds and are trying to persuade them to choose themselves.

Thursday, May 31, 2007

Income Gap: A Research

Two researches are listed;

(1) T. Piketty, E. Saez,

The evolution of top incomes : a historical and international perspectives, American Economic Review, 2006

(2) David H. Autor, Lawrence F. Katz and Melissa S. Kearney,

Measuring and interpreting trends in economic inequality, American Economic Review, 2006

The Coase Theorem: A Review

I found an interesting post; John Lott, a economist of SUNY-Binghamton, gives the following comment:

When Greg (Gregory Mankiw) made the claim about the Coase theorem only applying when transaction costs are zero with the note that when transaction costs are positive it matters who we give the property rights to.

That is not quite right. The Coase theorem implies that if the transaction costs are less than the gains from trade it doesn't matter who we assign property rights to. Similarly, I wish that Russell (Russell Roberts) had raised the point that the market will solve externality problems, not just when transaction costs are zero, but when they are less than the gains from trade.

What does the Coase theorem mean?

Mankiw's famous introductory economics textbook says, "the Coase theorem* is the proposition that if private parties can bargain without cost over the allocation of resources, they can solve the problem of externalities on their own." [Mankiw(2007), Principles of Economics, 4th ed., pp210-211.]

There Mankiw considers a simple problem: Dick owns a dog named Spot. Spot barks and disturbs Jane, Dick's neighbor. Dick gets a benefit from owning the dog, but the dog confers a negative externality on Jane.

Question: Should Dick be forced to send Spot to the pound, or should Jane have to suffer sleepless nights because of Spot's barking?

To solve the above problem, we compare the benefit that Dick gets from the dog to the cost that Jane bears from the barking. If the benefit exceeds the cost, it is efficient for Dick to keep the dog and for Jane to live with the barking. Yet if the cost exceeds the benefit, then Dick should get rid of the dog.

According to the Coase theorem, if Jane can offer to pay Dick to get rid of the dog and if Dick accepts the deal(or if the amount of money Jane offers is greater than the benefit of keeping the dog), the barking problem will be solved.

Of course, we can consider another possible solution: if Dick can offer to pay Jane to allow him to keep the dog and if Jane accepts the deal(or if the amount of money Dick offers is greater than the benefit of peace and quiet), it will also be solved.

What makes difference between the two solutions? It is just only whether Dick has the right to a barking dog and Jane the right to peace and quiet. But in either case they can reach the efficient solution, according to the Coase theorem: Dick and Jane can always solve the barking(externality) problem and reach the efficient outcome by bargaining over the price whether Dick has the right to a barking dog and Jane the right to peace and quiet.

The Coase theorem says the efficient amount of the good involved in the externality(the barking or peace and quiet) is independent of the distribution of property rights (Dick's right to a barking dog and Jane's right to peace and quiet.) if there are no income effects.

That is, it means that the demands for the good causing the externality(Dick's dog) doesn't depend on the distribution of income (Dick's and Jane's income). Therefore a reallocation of endowments doesn't affect the efficient amount of the externalities. [Hal Varian(2003), Intermediate Microeconomics, 6th ed., pp607-608.]

However, if they incur some cost in the process of the agreement and the bargain, they sometimes fail to solve the barking problem. The cost is usually called transaction cost and is the question to ask here.

Here's the point that Lott raised: The Coase theorem implies that if the transaction costs are less than the gains from trade it doesn't matter who we assign property rights to.

Mankiw says in his text, "The Coase theorem applies only when the interested parties have no trouble reaching and enforcing an agreement."

In my sight, the statement that "no trouble reaching and enforcing an agreement" is no better than that "no transaction costs in reaching and enforcing an agreement". If it is right, Lott suggests that Mankiw state that the Coase theorem applies if there are "less transaction costs than benefit in reaching and enforcing an agreement."

However, Mankiw says later in his text that if the benefit of solving the barking problem is less than the transaction cost Dick and Jane might choose to leave the problem unsolved. [Mankiw, pp211] In this case it matters who we give the property rights to and the Coase theorem doesn't apply.

In this point, Lott is the same as Mankiw, I guess. I would like to listen to both about that.

* The Coase theorem comes from Ronald Coase, an emeritus professor at the University of Chicago Law School and a Nobel winner of economics in 1991.

Wednesday, May 30, 2007

A Thousand Winds

(Author Unknown)

Do not stand at my grave and weep,
I am not there, I do not sleep.

I am in a thousand winds that blow,
I am the softly falling snow.

I am the gentle showers of rain,
I am the fields of ripening grain.

I am in the morning hush,
I am in the graceful rush

Of beautiful birds in circling flight,
I am the star shine of the night.

I am in the flowers that bloom,
I am in a quiet room.

I am in the birds that sing,
I am in each lovely thing.

Do not stand at my grave and cry,
I am not there. I do not die.



What do you feel from the above poem? In Japan it has become very popular. It is very short and very refreshing, I think. It is not only about the death of the loved, but the words from the death.

However, there's no sadness but a piece of invariable law in it; in the long run, we are all a thousand winds.

Sunday, May 27, 2007

At A Loss For My Way

Two years ago I was at a loss for my own way to go next in my life. After I graduated from Osaka University, I worked for a small company for a while. While working there, I found what I was doing wasn't what I'd wanted to do since I was the first college student, so I quit the job.

I'd wanted to write and speak as a career and then I started the job of writing at the company. But, as is usual, the job I was given there wasn't what I had heard at a job interview.

To speak precisely, I misunderstood it: It wasn't to write but to make a phone call to as many companies as I can. Certainly it is to speak in public that is my another thing I've wanted to, but it doesn't need my experience at the university and at the other jobs I've done before.

It's not to speak for any other person, but to speak for our own profit. I spoke to unknown people through the phone to find new customers for our service. For that purpose, I was asked to do anything.

However, the job experience is never worthless in my life, I guess. It's the way I had to go through. Actually it made me find it much clearer what I want to, and I've prepared for studying abroad since I quit it. I wanted to go to the US grad school to join the educational activities as my own career. For example, I want to teach and to write some research reports at university or at college. About more than one year have been passed since I started.

Now I am not at a loss for my way to go. I can see clearly the way in front of me. It is a waste of time to think over whether to go or not.

Thursday, May 24, 2007

Master Degree


I got the master degree at Osaka University two years ago. However, this master degree doesn't guarantee my proficiency in economics analysis.

ネットで経済数学

経済数学について、一部であるがここに良い資料をまとめた。

経済数学一般;
http://econ.atnifty.com/?Theater%20of%20Economics

もう一つ;
http://animus.doshisha.ac.jp/hendou/hendou.html

さらに、
http://www.kier.kyoto-u.ac.jp/~hara/NoteBySakamoto070411.pdf#search=

微分方程式一般;
http://www.math.meiji.ac.jp/~mk/lecture/kiso4/kiso4ode.pdf#search='%E9%9D%9E%E5%90%8C%E6%AC%A1%E5%BE%AE%E5%88%86%E6%96%B9%E7%A8%8B%E5%BC%8F%E3%80%81%E7%B5%8C%E6%B8%88%E5%AD%A6'

マクロ経済学;
http://www.econ.keio.ac.jp/staff/ito/lecture/index2001.html

厚生経済学;
http://www.iser.osaka-u.ac.jp/~saijo/lec/micro/02/lec-note.pdf

Note; I'm looking for good math text on the internet. If you know about some good materials on math available to economics, please let me know!

Monday, May 21, 2007

不幸せなタバコ

さて、面白い記事を見つけたので、紹介しよう。
 
毎日新聞
ヘビースモーカーは、健康リスクや多少の値上げといった「脅し」にはほとんど動じないが、価格が800円になると約7割が禁煙を試みる――。

ニコチン依存度があまり高くない喫煙者には、価格や健康情報も禁煙を試みる動機になった。依存度別の調査は国内初という。 喫煙者616人(平均40歳)を対象に昨年5月にインターネット上で行ったアンケートを分析した。ニコチン依存度を「起床後、いつ最初に吸うか」などによって、高▽中▽低度に3分類。たばこ価格を300円(現状)▽400円▽600円▽800円と変えたり、公共の場での罰金の有無、吸わない家族が肺がんになる可能性など、さまざまな条件を設定して、「やめるか、吸い続けるか」を聞いた。 

高度依存者は価格が欧米並みの600円になっても、禁煙を試みる率は30.2%(中度63%、低度78.1%)だった。ところが800円になると、高度67.9%▽中度93.4%▽低度96%に。価格以外の要素は、高度依存者にはほとんど禁煙促進効果はなかった。一方、中低度依存者は「喫煙による死亡リスク」が高まるほど禁煙を試みる率も上がった。 研究成果は、英科学誌「タバココントロール」と厚生労働省の学術誌「厚生の指標」に近く掲載される。
【鶴谷真】 5月21日

もう一つ同じ内容の記事を。

京都新聞
たばこの価格や健康影響などに対する喫煙者の意識と行動を、行動経済学の手法で調べたところ、価格が2倍になればニコチン依存度が比較的低い人の多くが禁煙を考えることが、依田高典・京都大経済学研究科教授、西村周三副学長、後藤励・甲南大准教授らの研究で分かり、21日に発表した。

ニコチン依存度が高いヘビースモーカーは、3倍近い800円になっても、3人に1人は禁煙を考えないなど「頑固」だという。 20歳以上の男女1022人に対して、インターネットを通じて、喫煙の有無やニコチン依存度、禁煙を考えるきっかけとなる事柄などについて調査し、行動解析した。依存度を考えた研究は日本で初めて。 「朝起きて5分以内に喫煙する」などの高度ニコチン依存者は、たばこ価格が現在の2倍の600円程度になっても、禁煙を考えるのは30・2%だったが、中度で63・0%、低度では78・1%と、依存度が低いほど禁煙効果が高いことが分かった。低中度の場合、「喫煙による死亡リスク」「家族の肺がんリスク」などが高く見積もられた情報を知っても禁煙を考えるが、高度依存者は判断材料にしていなかった。 

喫煙者と非喫煙者それぞれの行動傾向についても解析した。100円で確率2分の1のギャンブルをするかしないかを選ぶとき、非喫煙者は期待する賞金が269円でないと選ばないが、喫煙者は214円で選び、ギャンブル好きな傾向があるという。「ギャンブラー的傾向がたばこのせいなのか、そういう人が喫煙しているのかは分からない」(依田教授)という。 西村副学長らは「思い切った値上げが禁煙を考えさせることが分かった」といい、実際に禁煙行動につながるのか、何が禁煙の成否に関係するのか、さらに研究を進める。
5月21日

さらに興味深いデータがあるので参照して欲しい。これは読売新聞のアンケート調査であるが、

2006年7月1日のたばこ税増税で、禁煙したり喫煙本数を減らした人は喫煙者の約2割だった。「近く禁煙したい」と答えた2割を合わせると、喫煙者の約4割がたばこと距離を置こうとしていることがわかった。(水上嘉久)

また、タバコの消費量と値段の関係であるが、ここにタバコの値段の国際比較なるものがある。このサイトからの引用は下記のとおり。

イギリスでは1981年に20%もの値上げを行った結果、消費量が16%減少しました。…たばこにかかる税金の小売価格に占める比率は、アメリカが27%、カナダ86%、ドイツ73%、アイルランド75%、ニュージーランド77%となっています。日本のたばこ税は消費税を含めて59.7%です(「ワールド・スモーキング&ヘルス」誌、90年)。…95年現在の紙巻たばこ1箱(20本)の価格を高い国から順に並べると、…日本は2.47ドルで16位に入っています。

この資料を見ると、日本はまだ随分タバコ1箱の値段が安いようである。経済学が教えるように、財への需要は価格の減少関数であることが類推できよう。そして、需要は価格だけではなく、税金からも影響を受けることが見て取れよう。

さて、私の母校である大阪大学社会経済研究所の池田新介教授の話によると、せっかちな人ほど、喫煙をするという。つまり、一般に喫煙者は、タバコを吸いたいという現在の利益と、健康を害するという将来の不利益(の割引現在価値)との比較において、現在の利益を優先し(忍耐力が低い)、健康のリスクを省みない(危険回避度が低い)からこそ喫煙に走るという。

また、所得が高く、幸せだと感じている人ほど、せっかちではなく、不幸を感じている人ほど当面の心の平安が求められるという。そして、タバコを吸う人はあまり幸せではないという。この不幸の大きさは、年収200万円が減じたのと等しいという。大変面白い研究である。

ちなみに、私はタバコを呑んだことは一度もない。タバコがどんなものかを知らない。ただ、隣でタバコを吸われるとあまりいい気分ではない。不快だ。ハーバード大学経済学部のロバート・J・バロー教授もタバコが不快だとおっしゃっていた。

いずれにせよ、タバコがなくなるのは私にとっていいことである。

Sunday, May 20, 2007

Up Or Down?

Now the Japanese economy has been said to be going up. However many people still don't think so. I'll pick up the related articles from three big newspapers in Japan, Yomiuri, Asahi and Mainichi.

The Yomiuri Shimbun
The uptrend in personal spending and exports contributed to boosting GDP, the report says. The GDP is the value of all the goods and services produced in a country.
The quarter-on-quarter growth in GDP for nine consecutive quarters was marked for the first time in 10 years since the previous record set from the January-March period of 1995 to the corresponding period of 1997.


Analysts said this indicates that the current business expansion, the longest in the postwar period, is firm. Nominal GDP--calculated based on current prices--for the January-March period rose 0.3 percent over the previous quarter or at an annualized 1.2 percent, marking a quarterly growth for the second straight quarter, but the growth rate was half that recorded for the real GDP. The real GDP growth rate for fiscal 2006, which ended on March 31, stood at 1.9 percent, the same growth rate as projected by the government.

Hiroko Ota, state minister in charge of economic and fiscal policy, told a press conference Thursday after announcing the preliminary report on the GDP, "It's too early to say the country has emerged from deflation, although departure from it is in sight." The government earlier set the goal of declaring a "departure from deflation" in fiscal 2006.

A breakdown of the January-March quarter GDP by demand showed that private consumption, which accounts for more than 50 percent of GDP, climbed 0.9 percent over the previous quarter, registering growth for the second straight quarter. The growth is attributable to the brisk business performance of the fast-food and restaurant industries, and favorable sales of beer and other drinks due to the unusually warm winter. Exports jumped 3.3 percent in the January-March quarter, surpassing the growth rate of 0.8 percent recorded in the previous quarter to mark the eighth straight quarterly growth. Plant and equipment investments dropped 0.9 percent for the first decline in five quarters, a result caused mainly by the drop in investments in communication business and car production. (May. 18, 2007)


The Asahi Shimbun
The nation's economy continued on its record-setting period of expansion, but analysts warn that is still too early to break out the bubbly. They say a number of factors remain problematic, including shrinking corporate spending on plants and equipment and a possible future slump in consumer spending.


Japan's real gross domestic product increased by an annualized 2.4 percent in the January-March quarter, or by 0.6 percent from the previous quarter, according to the Cabinet Office's preliminary report released Thursday.


The seasonally adjusted figures represent the ninth straight quarter of expansion, fueled by growth in personal spending and exports. Although the annualized growth rate exceeded the government's estimated potential growth rate of nearly 2 percent, it was still less than half of the 5 percent rate recorded in the December-October quarter in 2006. The government boasts that the current economic expansion has exceeded the Izanagi boom, which lasted a then record 57 months from 1965 to 1970.

But analysts warn that the current economy lacks dynamism. In fact, some key components weakened in the fourth quarter of fiscal 2006. Corporate investments in factories and equipment, which had been the driving force in the recent recovery, declined by 0.9 percent from the October-December period, when the figure jumped by 2.3 percent. The shrinkage underscored a lack of confidence in the electronics and communications industries, as well as among automakers.
Personal consumption, which accounts for more than 50 percent of GDP, increased by 0.9 percent in the January-March period thanks to the warm winter, according to the Cabinet Office's report. Sluggish consumer spending had long been blamed for the previous economic doldrums. But the rate has been recovering since the July-September quarter of 2006, when spending declined 1 percent.

For the January-March quarter, the warm winter encouraged consumers to spend more on dining out, alcoholic beverages and recreation. However, a Cabinet Office official said the warm weather was about the only factor that contributed to the growth in household spending.
The 0.9-percent growth in personal consumption was, in fact, lower than the 1.1-percent increase recorded in the previous quarter. The declining growth rate--coupled with the sluggish hike in workers' wages--has fueled doubts that personal consumption will stay on track for a sustainable recovery.

Under the central government policy of transferring tax sources worth 3 trillion yen to local governments, the national income tax on individuals has been lowered since January. But local resident taxes will be raised in June to offset the reduction in the national income tax rate. That increase will push down personal consumption by 0.4 percentage point in the July-September period, according to the think tank. "It is too early to determine that personal consumption has fully recovered when considering temporary factors, such as the warm winter and the tax effects," said Takahide Kiuchi, a senior economist of the institute. Exports rose sharply, by 3.3 percent, in the January-March quarter, and contributed to 0.4 percentage point in the 0.6-percent GDP growth. Exports of electronics, communications machinery and chemical products increased to China and Europe. But exports to the United States and Southeast Asia declined.
And deflation has not been licked. The GDP deflator, an index indicating overall price trends, fell by 0.6 percent in fiscal 2006 from a year earlier.
(IHT/Asahi: May 18,2007)

The Mainichi Shimbun
Japan's economy expanded for a ninth-straight quarter from January to March, but the pace of growth in the world's second-largest economy began to slow.
Compared to the previous quarter, the economy expanded 0.6 percent, the Cabinet Office said Thursday. If maintained for a full year, the economy would grow 2.4 percent, just below the 2.6 percent forecast by economists surveyed by Dow Jones News wires.

While the increase marks the ninth straight quarter of growth, the pace slowed from a 5.5 percent annualized growth rate in the October-December period. That was the fastest growth rate logged by Japan in three years.

Japan has staged a recovery from more than a decade of economic stagnation, with help from healthy exports and an increase in domestic consumption. But stable growth is still vulnerable to a possible slowdown in the United States, the world's largest economy and a major market for Japanese exporters. Just last month, the United States reported its worst economic growth in four years on concern that troubles in the U.S. housing market will trigger a recession. The economy crawled at a 1.3 percent pace in the opening quarter of 2007.

Also sapping strength from Japan in the January-March quarter, the country's fiscal first period, was a 0.9 percent drop in business investment. That marked a sharp reversal from a 2.3 percent increase in the previous quarter.
Consumer spending, which accounts for more than half the economy, climbed 0.9 percent from the previous quarter, but the pace of expansion slowed too, from 1.1 percent in October-December.
Exports helped offset slowdowns in other sectors, shooting up 3.3 percent. They rose a meager 0.8 percent in the previous quarter. (AP)
(May 17, 2007)

My insight is that the economy depends on the aggregate demand. As macroeconomics says, the economy would go up faster than the reports say if the demand were even stronger. The fast-increasing growth is not so important to us, but it is important that we can be satisfied with the present condition of the economy and our life. The critical question is: are you happy with your life?

How To Make More Profit

09/10/2010 revised

I recognized an accurate way of calculating a profit rate, which salespersons need to know in their business.

What is a profit? We should go back to Econ10:

(1) (Profit) = (Revenue) - (Cost)

=(Selling Price)×(Goods) - (Cost Per Good)×(Goods)

= {(Selling Price) - (Cost Per Good)}×(Goods)

And what is a profit rate?

(2)
(Profit rate) = {(Selling Price) - (Cost)}/(Selling Price)

The above math is easy to tackle. However, a calculation related to a decimal should be necessary to take a good care for; a cup of tea sells for $10 in your cafeteria (You don't have to say it is too expensive, but it's just an example to make myself understood easily!) and its cost is $5.

What is the fraction that they can take? What do you think is the profit rate?

(Profit rate) = (10-5)/10=0.5

This tells that
just a half of the selling price is what they can take.

Consider this case: I would like to add a 50% profit to the cost of a cup of tea and find the selling price. We can get it by increasing the cost by 50%. It's easy to calculate:

(Selling Price) = (Cost)×(1+Profit Rate)

In this way I get 7.5: (Selling Price)=5×(1+0.5)=7.5

It is less than the above selling price, $10. Why? If we want to find the reason, we must solve the selling price from (1):

(3)
(Selling Price) = (Cost)/{1-(Profit Rate)}

Now I get $10 by selling a cup of tea. This is one of the frequent miscalculations. To sum up, if you want to get 50% profit, do not multiply the cost by the gross profit rate, (1+Profit Rate), but divide it by (1-Profit Rate). Otherwise you will lose a big money in your business.

Friday, May 18, 2007

The Cost of Murder

Recently I've heard of some news that depress me greatly. I wonder how easily one can kill the other. It's a very awful case that a high school student killed his mother and cut off the head. Here are the excerpts:

The Yomiuri Shimbun
A 17-year-old high school student in Aizuwakamatsu, Fukushima Prefecture, arrested on suspicion of murdering his mother allegedly cut off her right arm as well as her head, police said Wednesday.
(May. 17, 2007)


The two other cases are:

The Yomiuri Shimbun
A 30-year-old man was arrested Tuesday on suspicion of abandoning the body of his former wife in Osaka Bay off Kobe, police said.
The police identified the body found Friday in a bag floating in the bay

(May. 16, 2007)

The Yomiuri Shimbun
A man was arrested Monday after he allegedly strangled his wife Sunday night, apparently when they quarreled over obscene images she discovered on his cell phone,.... but the charges were upgraded to murder.

(May. 8, 2007)

And here's the question:

Question: Why does a person kill the other person or himself/herself?

Economics may tell the reason: When the (marginal) benefit of killing a man is greater than the (marginal) cost of that, a murder will occur.

What's the benefit of murder? For example, by killing a person the murder can feel better. However, a murder doesn't usually think of the risk of being copped. Being caught robs him of his freedom of action and makes him fall into jail for long time. In this regard, the lifetime stream of cost of being in jail is far greater than the benefit of murder. But I wonder why one kills the other.

I think a murder can't think of his future in his life, or can only look ahead in the short run. He is shortsighted. And so he can murder. He can't behave optimally as economics suggests, and he tends to satisfy his unforeseen desire to kill a mam.

If the benefit of murder were greater than the cost of that and one really killed the other, what would prevent the killing?

From the viewpoint of public policy, one of the possibilities of preventing murder is to raise the cost to murder. For example, to put a murder to death is a strong deterrent to murder. Some pursuing the preservation of human rights disagree with this suggestion greatly, but I would ask them if a murder has the human rights. He kills a person who has the human rights as well and infringes the right of living. Should we protect his own human rights?

I suggest the death be given to a murder promptly to keep our society from awful murder. This is a better way to reduce the murder in our society.

Thursday, May 17, 2007

価値相関図

ここ近年、私はMBAコースの経済学に関心がある。そこで知ったのは、ネイルバフ・ブランデンバーガーのゲーム理論の本である。

その中で、非常に興味深い概念を知った。「価値相関図」である。詳しくは本を買って読んでください。 ただ、どんなものかだけは紹介しよう。

          顧客
         | 
競争相手――企業――補完的生産者
         |
        供給者 

上記の本では、この相関図の解釈が様々な事例とともに紹介されている。何も企業経営にだけかかわることではないような気がする。今の自分が置かれた状況を分析するのにも役に立ちそうだ。非常に興味深い。

また、後日この話を詳しく展開したい。     

Saturday, May 12, 2007

The Terminator From the University of Wisconsin

The famous American actor and the governor of California, Mr. Arnold Schwarzenegger graduated from the University of Wisconsin.

He earned a B.A. from the University of Wisconsin-Superior, where he graduated with degrees in international marketing of fitness and business administration in 1979.

I'm happy I am going to the same university this August.

ミルウォーキー

さて、私の米国での新しい住まいについて学ぼう。

ミルウォーキーは全米第19位の規模の都市で、ビールの名産地。何かワクワクしますね。

Friday, May 11, 2007

憲法第9条

国会では、改憲論議が盛んである。今年夏の参院選を控えた安倍首相は改憲に向け、気合十分である。

改憲については、慎重な意見が根強い。特に、憲法第9条(戦争の放棄、戦力の不保持、交戦権の否認)を変えることに対する抵抗はかなり強い。

与党である公明党は、改憲について及び腰である。自民党内にも、現状の「解釈改憲」(憲法の条文、文言は変えずに、その時々の時勢に応じてその解釈を変える)でよいとする姿勢がある。

私は、改憲に抵抗している人の多くは、いわゆる「第9条」の改憲に警戒の念をもっている人ではないかと考えている。

そこで、本日はこの「第9条」の役割について考えていきたい。「第9条」は世界に対していかなる影響を及ぼしてきたのか。


私はこの「第9条」の役割を考えるとき、「ゲーム理論」を使うようにしている。簡単に紹介したい。


日本と中国を例にとろう。ここでは、日本と中国が対立し、両国ともに自分の国と安全を守るために、「核武装する」、「核武装しない」という2つの戦略を立てている。両国ともに「脅かされる状態」だけは絶対に避けたい。

自国の安全を守り、かつ自国が国際的に優位な立場を築くにはどのような戦略をとるべきなのか。ここから、ゲーム理論がスタートする。

〔日本の考え〕
(1) 中国が核武装しないとき、日本は世界が平和であることが何よりも望ましいが、中国に対しては、安全保障上常に優位でありたいと考える。そこで、日本は、「核武装しない」ことよりも、「核武装する」ことを選ぶ。

(2) 中国が核武装するとき、日本は国家の安全を守るため「核武装」を選択する。

〔中国の考え〕
(1) 中国は、日本が核武装しないとき、世界が平和であることが何よりも望ましいが、日本に対しては、常に優位でありたいと考える。そこで、中国は、「核武装しない」ことよりも、「核武装する」ことを選ぶ。

(2) 日本が核武装するとき、中国は、国家の安全を守るため「核武装」を選ぶ。



よって、日本、中国双方は、「核武装しない」ことよりも「核武装する」ことを選ぶ。

このように、相手がいかなる戦略をとろうとも、自分がとる戦略(ここでは「核武装する」)は変わらない。このような戦略をゲーム理論では、Dominant Strategy 支配戦略 という。

この場合、両国にとって、「核武装する」ことが支配戦略であり、両者は「核武装する」状態に陥る。

このとき、両国は自分の利得を優先するあまり、結局世界が緊張状態に落ち着いてしまう。
このように、個々にとって「よいこと」が、全体にとって「悪いこと」になってしまうジレンマ(板ばさみ状態)に直面するゲームを Prisoners’ Dilemma Game  囚人のジレンマゲーム と呼ぶ。 

できれば、お互いが武装しあうより、平和であることが望ましい。お互いが武装しあうような囚人のジレンマをどう回避すればよいのか。一つの有効とされている方法は、

「 核武装しないこと、核放棄を世界に対して宣言する。」

ということである。これが信頼できる宣言であるなら、相手も核武装しようとはしない。なぜなら、核武装は莫大な軍事資金を必要とし、できれば平和な状態のほうが金もかからず、幸せであるからだ。

この点で、「第9条」は世界が武器を持つ囚人のジレンマを回避する有効な力となっていると考えられる。


第9条が宣言している「戦力の不保持」は日本のみならず、中国、朝鮮半島を含めた東アジア全体の安全・安定に貢献しているのだ。 また、日本が国の方針として掲げる「非核三原則」も、東アジア周辺国の核開発競争の抑止に一定の役割を担っていると考えられる。

憲法第9条の改憲に慎重な政府与党の姿勢は、この点で理解できよう。重大な政治判断は常に慎重であることが求められるのだ。

Wednesday, May 09, 2007

Macroeconomics & Microeconomics

10/17/08 Revised

As the first-year grad student, I had to take at least two main courses of macroeconomics and microeconomics.


When I was the first-year undergraduate student, one teacher said in his class,

"Microeconomics puts a great trust in a free-market mechanism, while macroeconomics doesn't."

In my guess, his statement came from two English economists, Adam Smith and John Maynard Keynes.

Adam Smith believed that a market mechanism was functioning well by stating "an invisible hand" in his famous book, "An Inquiry into the Nature and Causes of the Wealth of Nations". On the other hand, Keynes was skeptical about such a free market mechanism in his noble book, "The General Theory of Employment, Interest, and Money".

Smith guessed that he or she would be rational in a free market economy and thus the economy as a whole would work well. Keynes said that he or she would not always be so rational that the economy could work well enough to avoid recession. Keynes thought that the failure of market such as recession would be inevitable.

Some economists think of Smith as a father of microeconomics, or classical economics, and Keynes as a father of macroeconomics.

However, I disagree with that idea. It isn't to the point! There's no wall between micro and macroeconomics anymore. They have much in common in that they explain the optimization behavior of economic agents; That is, they have shared the idea of individual rationality and incentive.

In their models, a market is often assumed well functioning and well organized too. Under such an unreal assumption, we can examine the working of our economy and the effect of public policy.

Microeconomics analyzes each individual behavior in our economy, while macroeconomics the working of our economy as a whole. Both of them try to solve the economic problems via the static and dynamic optimization theory, which is much more mathematical area than we have generally thought of as economics.

Visa

In this morning I was sent a Student Visa. Very quickly they gave it to me. I thought it would take more time for me to have a visa.

Come on, let's go to the unknown world, America!

Tuesday, May 08, 2007

A Producer of Hope?

When I was in the US Consulate, I found that they were keeping a strict watch over us. The photos on the white wall of the President Bush, the Vice-President Cheney, and Miss Rice caught my eye. And the Stars and Stripes told me that I would go to America soon. I thought as if I went to the United States at Osaka.

It is a precious time that I visited the US Consulate. There I saw many people queue up and apply for a visa. I wondered why they were going to America. A mother with her crying little girl, businessmen, young teenage girls, college students, elder women and men, and other Asian people.... and so on, they might have something to do for somebody important or something special.

What kind of hope do they have? What will they see in America? America is the largest country in the world, as you know, and has been always the land of opportunity. Peoples' expectation of being given many opportunities has made more people get there from their home countries. A wide variety of people constitutes the today's America.

However, is America really the land of opportunity? Some people say that America is the imperialism of freedom, democracy and free-market economy to conquer the world.

An imperialism seems to control the order and the mind of the people of the world as a whole, just as the Roman Empire. They say that America is the modern version of the Roman Empire. To them, the President Bush is the Emperor named the President, isn't he? If so, today would be the memorial when I became one of the slaves of the American imperialism!

A professor of my university also said that America was the Empire of the today's world in his lecture and criticized the foreign policy of America, especially,the war on Iraq.

To tell my insight about such a statement, I do not agree that America is an empire.

The President Bush is one ordinary American, not a special man. He was elected by ordinary Americans as well. This is one of the attractive aspects of the United States, I guess. In this regard, America is a special country in the world. (Some people may say that Mr. Bush is from the richest family in Texas and he is special. If you say so, our Prime Minister Shinzo Abe is also born with a silver spoon. )

In some way, I can say that every American can become the most powerful one named the President of the United States.

Our ancestors' strong desire for freedom and democracy made America, as the history says. It has really made many people freedom and wealth. I may be able to say that America is a producer of hope. But, of course, America doesn't give us hope for free. Catching a hope and making our dream come true finally depends on us. It should be never forgotten. I hope I will enjoy being in such a normal and a special country.

One Munite Interview

Today I went to the US Consulate at Osaka. There I applied for a student visa (F-1) and had a short interview.

I thought I would have more difficult questions for me, but they were all easy to answer. Here's the interview I had there:


Madam: Good morning. How long you have been waiting!

Me: Just one hour.

Leaning her head to the right, she took a look at my application form.

I seemed not to make myself understood in English, and once again I tried to reply to her greeting.

Me: One hour. (I thought I was asked how long I had been there.)

Madam: (She nodded.) Okamoto San, shimonn wo torimasu. (I'll take your fingerprints.)

At this time she began to speak Japanese a little, taking my fingerprints with a sensor.

Madam: Thank you.

Me: You're welcome.

Madam: Where do you want to go? (She spoke English again.)

Me: Wisconsin in the US.

Madam: This is the first time to go to America?

Me: Exactly.

Madam: How long will you stay there?

Me: 6 years.

Madam: (Looking at my I-20 form) Wisconsin....., hum,...Milwaukee. Great! I hope you'll have succeeded. Good luck! Good Bye.

Me: Thank you.

This is all one minute interview.

Monday, May 07, 2007

Dear Sirs

Tomorrow I am going to the US Consulate General to apply for a US visa. I'll have an interview with a native English speaker there. So I'm nervous.

I'll submit the form, the statement of purpose. This is what I talk briefly about my reason and my plan of studying at US grad school.


Statement of Purpose

May 8, 2007

U.S. Consulate General,
Osaka-Kobe


Dear Sirs:
My name is Taro Okamoto. I am applying for F-1 student visa to join the Ph.D. program in Economics at the University of Wisconsin-Milwaukee.


My purpose of visiting the US is to study economics. I think the US will provide me with the better place to study economics: The graduate schools in the US have attracted many students from all over the world. A wide variety of students has made them far better. And thus they have produced many economists. The economics program of UW-Milwaukee puts more attention on international economics and thus suits my intellectual interest. I hope I will have a sufficiently intellectual experience at UW-Milwaukee.

My career plan is to be a professor in Japan. I think it would not be easy to find the job as a professor not only in the US but also in Japan, even if I had the Ph.D. from the US graduate school. If I can not find such a kind of job, I will make a living by teaching English and math at cram school in Japan from the experience of my stay at the US graduate school. However, I will try hard to have a career as a university professor. I will get and do the job appropriate to my character even if I can not find the job I want to do.

There should not be any financial problem. I have sufficient funds to pay the first-year tuition and other living expenses. Please see the financial statement from the Post Office and the certificate of scholarship loans appointment from JSSO. Thank you very much for your attention.

Sincerely,
Taro Okamoto

Sunday, May 06, 2007

鶴の恩返し

久しぶりに日本語でブログを綴ろう。

私は米国の大学院に入学が決まり、今年8月に日本を発つつもりである。正直その実感はないが、普段どおりにちょっとずつその準備をしている。

私が日本を発ち、米国で勉強しようと考えた理由は以下3つである。

(1) 英語で経済学の研究作法を取得し、専門職(大学教員)に就くこと

(2) 異文化社会での生活を通して、将来のキャリアの可能性を広げること

(3) 人的ネットワークを形成し、見聞を広げること

以上である。

優先順位順に並べたが、(1)については、ほぼ絶望的との見方が支配的である。私が前に行っていた大学の教員は絶対に行くなと言っている。

(2)についても、(1)との関連で大学教員以外の道も模索すべきであるということである。大学教員になるには、論文の投稿実績もさることながら、何よりもそのときに自分に合ったポストが空いているかどうかが非常に重要になる。これは国連やOECDといった国際機関での職員採用と非常に良く似ていて、要は「空き」があるかどうかで、就職できるかどうかが決まる。また、採用側の選好、好みもあり、大学院で博士号を取得したから、大学教員になれるというものではない。

(3)については、将来のキャリアとは直接に関わりがないが、自分のこれからの人生において、米国での長期滞在は非常に有益な経験になるのではないかと期待している。また、米国への留学の動機は、将来のキャリア形成よりもこちらの方である。が、年齢を重ねるうちに、まずはご飯を食べることを考えなければならないことに気がつくのは言うまでもない。
私は当初日本の大学院でしばらくは勉強するつもりではあったが、民間企業でのキャリア形成の必要性をそこで実感し、修士号を得た後、とある民間企業に就職した。しかしながら、今考えると、そこの仕事は自分が真に望んでいた職ではなかった。そこで、私は自分には民間企業でのキャリア形成は分不相応で、他の選択肢を模索すべきであることを実感した。

そこで、高校の教師、予備校の講師など、人にものを『教える』仕事が実は自分にはあっているのではないかと考え、高校教師の教員免許の取得について考えたが、こちらもそのときにポストに空きがあるかどうかが決定的に重要になる。また、私はそもそもこちらの仕事を望んではいない。もしそうなら、最初から教員養成系の大学に入っていたであろう。

一方で、塾の講師は常に採用活動がなされ、今般の中学受験熱もあり、非常にその採用活動は活況を呈している。自分には一番近い、現実的な分野ではあるが、この仕事の『賞味期限』は非常に早いといわれている。つまり、40代も半ばに差し掛かると、塾は雇ってはもらえないのである。塾講師としてのキャリアをいくら積んでも、その年功を塾はあまり評価してくれない。そこでは、なによりも「若い」講師、生徒に「気に入られる」講師が求められているのである。求められるは、老練の教育者ではない。むしろ、口達者な若い営業マンだ。
したがって、壮年の講師は、ごく一部しか評価されない現状である。そのほとんどは、単発的な仕事や家業で食いつないでいるといわれている。

やはり、私には当初目指した『大学教員』の道を再度チャレンジしてみてはと考えた。この道も決して平坦ではない。むしろ厳しさはこちらの方が強い。そのときに、大学のポストに空きがあるかどうかも分からないし、年をとるとそれだけ就職の機会は狭まる。

こう考えたとき、自分に残された選択肢はあまりないことに気づかされる。

しかし私は、教育の価値を信じたいと考えている。これまでの私は、ある意味『教育』に救われてきたのである。私の学校での経験、思い出はあまりいいものではない。ある意味学校という場所、つまり中学、高校、大学は、私にとって地獄であった。しかし、そんな中にも自分を評価してくれる教師や同僚がいたことを書かないわけはない。自分を評価する人は、救いであり、宝であるのだ。

今度は私がその恩返しをしなければならないのである。

米国の大学院への応募の際、推薦状を書いてくださった私の恩師は、その恩返しをすることを私に示唆してくださった。今年3月、その先生は他界されたが、私にはその最後の言葉が印象に残っている。

無謀かもしれない。航路なき航海に旅立つ私を評価する者は誰もいないだろう。


しかし、私は『教育の価値』を信じたい。人を教えることを通して、真の教育的価値の創出・提供に貢献することが、私の天職ではないかと、最近気づき始めている。米国留学は何よりも教育者になるための『修行』であるのだ。

さて、教育とは何か。最後に私の考えを披瀝したい。

それは、人に『機会』を提供することである。人に『チャンス』を与えることである。どういうチャンスか。それは、自分が評価され、その仕事、その人生に誇りが持てるために努力することが許される『機会』であり、『チャンス』である。教育は人に、社会にそういったチャンスの提供することであり、私にはそのチャンスの提供を社会に対してしなければならないと考えている。

Saturday, April 07, 2007

A Blog On the Japanese Economy

I found a blog on the Japanese economy. I'll read it carefully.

You Can Do It

Yutaka Horiba, a professor of Tulane University, is my old teacher of the Graduate School, Osaka University and he cheered me up: "You can do it!"

I'm very happy with his words of encouragement. There is certainly a big risk in studying in the US because the degree of PhD from the US grad school doesn't necessarily guarantee a good job to me.

I'm worried about my future career; One professor of Osaka University told me not to go since it is too difficult to get a good job. And he told me as an example that one of his friends who was about 50 years old and had once got the PhD from Johns Hopkins University did still a part-time job in Tokyo, Japan. I think his story is right and I should try to understand what he wanted to say to me.

However, I feel like this worry will encourage me to do my best there. Of course, I should think about what I will be able to do in the future to make a living. And I should look for what I can do every time I think about my future.


One famous comedian in Japan always says that an anxiety about our future gets us to go ahead. I think so and my anxiety will work on me positively. It should not be a waste of time to try. And it should not spoil my life, I guess.

If I fail the preliminary exam and the assistantship for my grad study from the grad school, I will go back to Japan and give up studying economics and trying to get a PhD. In this case I will look for another job in Japan.

Let's go to the US! Before that, I'll plan ahead. I need a good plan.

Monday, April 02, 2007

Colder Wisconsin

I can see it is now colder in Wisconsin than in Osaka, Japan. Wisconsin is, as I've said before, the place I am going to for studying economics.

The weather of Wisconsin is certainly different from that of Osaka. I think that the first thing to do is to know it correctly. The weather is very important for the people living or expecting to live there.

Sunday, April 01, 2007

Sakura

The cherry trees are in full blossom now in Japan. Today I went to the park with my friend to see the cherry blossoms out. It was a clear, mild and a little cloudy spring day in Osaka. I could feel it was getting warmer and warmer day by day. Spring has been coming here.

How do you like Sakura? If you have some money, I would like you to go and see Sakura in Japan. You could enjoy it and feel the spring and the mind of Japan.

*The picture shows the Wakayama Castle in spring, which can be seen here. Wakayama is located down to Osaka. Sakura is the Japanese word of a cherry blossom.

Today is the April Fools Day

Oh, I found that today is the April Fools Day. I have to say that it is not a false that I go to the US this fall.

* This is not, what is called, the Cretan Paradox.

Two Schools Accept Me

As mentioned before, I am going to the U.S. graduate school this fall; I've applied to the following schools and I've just received their replies at last:

(1) The University of Hawaii at Manoa: Rejected

(2) The University of South Carolina, Moore School of Business: Rejected

(3) Binghamton University, State University of New York: Accepted

(4) The University of Wisconsin-Milwaukee: Accepted

The University of Hawaii is certainly attractive. But it is only the warm weather that lures me. It seems to have less professors and students with the similar intellectual interest to mine than SUNY and UWM.

Of two schools that can accept me, I hope for a grad study at UWM because I think it will meet my special interest on international finance and currency issues. I hear it is very cold there in winter. It is a worrisome point to me. I will need to be used to the cold.

* The topic of this column was recently released in the post of the previous column. There I talked about my application to grad schools with MVPY, an admirable regular commentator recognized by Harvard professor Greg Mankiw.

Friday, March 23, 2007

Grad Study in the US

I have stopped blogging for a while. It is about time I told to you I am going to the US to study economics this fall. However, it's not the time I told you much about it, but soon I'll tell you about my thought on the grad study in the US and my preparation for my grad study.

This blog will be changed to a US grad student's essay.

Tuesday, February 27, 2007

My Belief

I want to believe in the formula that I name the "success expectation". This is made by me. I'm not in success yet, but I'm trying for it now. This formula makes up two inputs: my own effort and luck.

(Success expectation) =F(effort, luck)

=0.8×(effort)+0.2×(luck)

where (effort) > 0, (luck) > 0, or (luck) < 0 and these are real numbers.

In my belief, the expectation of success will be higher if I make more effort. It is shown by the coefficient of effort being positive number, 0.8. Here it is an effort that affects success positively. However, the realization of success needs not only effort but luck itself. Luck would increase or decrease the expectation of success. The luck that affects success positively is called a good luck, while the luck that doesn't is a bad one.We need a good luck for success, of course.

By the way, where do these coefficients come from? Of course, these are not backed firmly by any theoretical reason, but by my belief. If only this formula would be true!

Monday, February 26, 2007

Spring Is the Dawn (春は曙)

March is coming just in two days later. It's a spring. The spring in Japan is both good and not good to us.

What is good is that we can enjoy cherry blossoms and pleasant and warm breeze. In spring, Japan turns elegantly pink. Japanese spring is beautiful. And what is not good is that we can suffer pollinosis. Once we suffer it, our eyes and noses come to itch very much. It's terrible.

A few years ago, a boy from London asked me why many women walking along the street were wearing masks. I replied, "it is because of pollen". Pollen causes pollinosis. So we Japanese dislike pollen. However, in a sense, it is a symbol of spring season. And it means the dawn of life. Spring is the dawn.

It's a Pity...

Japanese actress Rinko Kikuchi missed out on the Best Supporting Actress Academy Award today. It's a pity.

Mainichi Shimbun(Feb.26.2007)
Sumire Kunieda

LOS ANGELES -- Japan's Rinko Kikuchi missed out on the Best Supporting Actress Academy Award as favorite Jennifer Hudson took out the prize for her role in "Dreamgirls."

Hudson received the award at the 79th Academy Award ceremony at Kodak Theater in Los Angeles, leaving 26-year-old Kikuchi empty handed.

.....Kikuchi was nominated for her performance in "Babel," a story about communication that links Morocco, Tokyo, the United States and Mexico. Movies released in the United States in 2006 are eligible for this year's awards. Winners are selected by about 6,000 members of the Academy of Motion Picture Arts and Sciences. Other winners already decided so far are Alan Arkin as Best Supporting Actor for "Little Miss Sunshine" and "Happy Feet" for best animated feature. (Picture from Reuters)
By the way, she was born on 6th January 1981. To my surprise, it is just when I was born. I am also born on 6th January 1981. I think it a big honor! She is as old as I, but she is much greater than I. She is an international actress. In contrast, I am a very small international blogger.

Thursday, February 22, 2007

I'm Waiting For...

I'm now waiting for the replies of the graduate schools which I have applied to. I'm a little restless...

And tomorrow is the day when my younger brother will take the entrance examination of public high school. All I can do is to pray for his and, of course, my successes.

Is This Decision Right?

Yesterday Bank of Japan (BOJ) decided to raise the interest rate which has been harshly discussed among economists in Japan.

What we have to concern most about this policy decision is what effect it has on the economy. This is a very important question which remains to be unsolved, but there is a big disagreement among economists.

Economics has many unsolved problems which some people may think as fundamental economic questions that should have been solved by economists. This is one of them.

The Yomiuri Shimbun (Feb. 22, 2007)
The Bank of Japan's Policy Board decided Wednesday to raise the key interest rate by a quarter point, to 0.5 percent per annum, marking the first rate hike in about seven months since the central bank discontinued its zero-rate policy in July last year.

The Policy Board approved 8 to 1 Gov. Toshihiko Fukui's proposal to raise the unsecured overnight call rate, which is a primary target for the central bank's guiding of short-term interest rates, in a majority vote at its meeting. Among the board members, only Deputy Gov. Kazumasa Iwata voted against raising the rate. It is rare to see a split vote among the three central bank executives on the board.

The key rate is now 0.5 percent per annum for the first time in 8-1/2 years, since September 1998.

.....They judged that consumer spending and price levels--which had been seen as detracting from the likelihood of a rate hike--would basically improve in the mid-to long terms. At the previous meeting in January, the central bank's policy-setting board did not raise the key rate. Fukui said at the time: "There are various economic indicators, some are positive and others are negative. Thus we need to closely watch the trend for the time being."

A number of economic indicators released since the January meeting were seen as making a rate hike less likely, including the slowing in the rate of increase of the consumer price index and a slowdown in the pace of wage increases. Many financial market players believed the economic data would not be enough to persuade the central bank to raise rates at this time.

We have mainly two macroeconomic views on the effects of high rates on the economy:

(1) Keynesian macroeconomic theory tells that high rates will generally put a downward pressure on consumer spending and investment expenditure. So high rates would be bad news to us because it imposes the interest burdens on our social life.

(2) Real-Business-Cycle theory,in contrast, tells that high rates will do nothing to us. The interest rates we are now taking up here are not real but nominal rates, that is, those unadjusted for inflation rate in the economy. According to this theory, only real interest rate influences our economic activities; High real rate decreases our today's consumption expenditure because it now becomes more costly relative to our future's consumption. And it makes us work harder because what we earn now has higher value in the future, that is, we can get the higher rate of return on saving. In sum high rates would be good news to us because we can enjoy more goods and services later. However, in this case, "nominal" high rates wouldn't do any effect on the economy.

Which view do you support? I feel Keynesian is natural, but I'm not sure for the reason. Later I'll talk to you about it.

Saturday, February 17, 2007

Is Japanese Economy Strong Yet?

Japanese economy is being said to be strongly recovered. However, many people living in Japan, of course, including me, don't think that they are in such a rising economic situation.

The Yomiuri Shimbun(Feb. 16, 2007)
......According to the report, the increase in real GDP for the last quarter was the highest since the January-March period in 2004, when the annualized growth rate rose 5.1%, compared to that in the previous quarter, and exceeded the average rate of 3.8 percent forecast by seven private research institutions.

Hiroko Ota, state minister in charge of economic and fiscal policy, said at a press conference the same day, "The recovery trend continues to look solid." However, she added, "Consumption is still weak, and I expect the Bank of Japan will continue supporting the economy from the monetary side."

The nominal GDP, which reflects price changes, increased 1.2 percent for the last quarter compared with the previous quarter, and 5 percent at an annualized rate. The quarterly rise was the first increase in the last two quarters. The figures also indicated that the situation in which real growth rates exceed nominal growth rates, resulting from a drop in price levels, had ended after eight successive quarters since the October-December period in 2004.

The GDP increase in the October-December period was pushed up by a 1.1 percent increase in personal consumption, which accounts for more than 50 percent of GDP. It was a significant rise, following a 1.1 percent plunge in the preceding July-September period and an increase for the first time in two quarterly periods. Spending on electrical appliances, such as flat-screen TVs, as well as on accommodation and other leisure-related services was strong, according to the report.

Reading such an article reporting an economic recovery, I don't think that the economy is really recovering, but that the statisticians working for the government see it recovering.

There is a big difference between the views on economy of them and us. Statisticians generally watch an economy through the data and judge it whether it is recovering or stagnant by analyzing many manipulated data set. In contrast, we are generally watching an economy directly with our eyes, or feeling how it works in our everyday life because we can see it only by doing that.

The economy seen by the data might not be the same as that seen in our everyday life. It is because the statisticians usually see it as a whole while we see it as part. It is impossible to see it as a whole without any other statistical measures. And therefore it is sometimes hard for general people to understand what economists say about the situation of the economy. This is not a problem of which view is right, but of our feeling.

In this sense the business cycle we normally say means how we are feeling everyday economic life.

Saturday, February 03, 2007

What Is It?

An old adage says to me: Ask, and it shall be given you.

What is it to me?

A good job? Yes, it is.

A good life? Yes.

A good wife? Of course, yes.

And some good children? Absolutely, yes.

Such a happiness never comes to me; It should be caught by my efforts.

Sunday, January 28, 2007

Supply and Demand

When I first met the supply-and-demand diagram, I was a junior high school student. I was then too young to know how to use the diagram. I didn't know even which curve the supply is. (Of course, the blue line is a supply curve, while the red line a demand curve.) When I came to know how the diagram is used among economists, I was a third grade university student. Until then I hadn't known the usage of the supply-and-demand diagram.

If you were a junior high or high school teacher, how would you teach it as easily to your pretty students as possible?

This might be a little hard request. If I were the teacher, I would teach like that:

First, I teach you the way demand is described. Suppose you were in the grocery store. There you meet apples. It is cheap. Since you know that they are good for your health, you buy some. Next day you are again in the same store. You meet again apples. But you notice they're a little more expensive. Though they're good for your health, you don't buy any. You buy some oranges, instead, because they're less expensive and also as good for your health as apples. So the demand for an apple decreases as the price is higher, and vice versa. That's why a demand curve slopes downward.

Second, I teach the way supply is described. Before you know that, you have to note that the supply is the other side of the same market while the demand is the one side.

Suppose you were also in the grocery store. There you sell (not buy)apples. Since you know that it is good for your business to sell them for higher price, you tend to sell for higher price. Next day you are again in the same store. You sell apples. But you notice they're a little more cheap. Since it is bad for your business, you don't sell any. You sell oranges, instead, because they're less inexpensive and also as good for your business as apples. So the supply of an apple decreases as the price is lower, and vice versa. That's why a supply curve slopes upward.

You like it? Let me know what you would like to tell if you taught the suppy-and demand diagram.

* The above diagram is from Wikipedia.

Thursday, January 25, 2007

One Japanese Blog

Huuzokusanpo is a well-organized blog. I like and enjoy it very much. So I'll introduce it to you. It's written all in Japanese. It's no problem to non- Japanese speakers, however. Most of parts of the blog are pictures. You can enjoy seeing it, but not reading it. The primary thing that we think of is what picture it takes. And what does it tell?

This blogger visits many remains of red-light districts all over Japan. And it takes and collects the pictures. It tells the history of these regions with a few Japanese words. However, I don't think you need reading them. It has good pictures. You can see them.They are worth seeing. Most of them could be seen only in Japan. You can know some true aspects of the Japanese cultures.You can know the other side of Japan, that is never reported by the press. You can see the present red-light street scenes without walking along there. I can see the sights of the red-light towns in Japan these days.

It's a reasonable journey. I hope you can enjoy it. However it seems to be the blog that men are more interested in than women. If you are an anthropologist or geographer, you can be more interested in this blog.

Economics Can Save Me?

Recently I have spent a little too much money on books. I like having and reading them. But I often sell some books I bought before to a used-book store near my house. It is at the cheaper price than I bought them that the store master usually buys. I sometimes don't know why I buy books. It seems that I make him happier to sell him my books at the lower price. I wonder if I am also happy with such myself. So I might be a little sick and need some mental care. It seems that I might be unsatisfied with my present situation.

That's why I can't save money. It is one of my problems that I have been worried about. I know I have to tell myself to change my financial management. In this case, economics tells me how to save money: Not to spend! Hummm,...Exactly!

I know I must save money for my future life and some uncertain emergency needs. I might have a higher rate of time preference, which means I prefer the future life to present life. However I can't tell the rationality of my preference and book-buying behavior. Anyway I decide not to buy more books but to put more attention into reading them. Save money and time for my own future life! That's what I am saying to myself.