The impact of unstable aids on consumption volatility in developing countries

In recent years, a large and expanding literature has examined the properties of developing economies with regard to the macroeconomic cycle.1 One such property that is characteristic of developing economies is large fluctuations in consumption. Meanwhile, aid for the low income countries is extremely volatile, and under certain circumstances, the volatile aid amplifies the consumption volatility. This document examines whether it is possible that the volatile aid yields high consumption volatility in African countries that constitute the majority of the low income countries. Our numerical analysis reveals that the strongly influential aid disbursements yield a considerably large fluctuation in consumption.

Large Fluctuations in Consumption in Least Developed Countries

The objective of this paper is to shed light on mechanism which increases fluctuation in consumption of least developed countries. In general large fluctuation in consumption makes consumers worse off. This fact suggests that accumulation of knowledge on the generating mechanism of the large consumption fluctuation very likely contributes to welfare improvement of the least developed countries, through policies stabilizing consumption. We specifically investigated the fluctuation in consumption, through the numerical analysis with a dynamic macroeconomic model.

Growth-cycle nexus

This research sheds light on the negative correlation between economic growth and business cycle in less developed economies. Whereas many previous studies explain the negative correlation from a viewpoint in which business cycle affects economic growth, we attempt to present a hypothesis based on the other influence direction in which economic growth affects business cycle. We investigate the validity of the hypothesis using two methods: econometric analysis and numerical analysis. We find that the econometric analysis supports our hypothesis. The numerical analysis shows that the effect of the proposed hypothesis produces the negative correlation between economic growth and business cycle.

Shock Transmission Mechanism of the Economic Crisis in East Asia : An Application of International Input-Output Analysis

This paper investigates the impacts of the 2008 economic crisis on industries in East Asia. By using the updated Asian international input-output table for 2008, the paper attempts to identify the transmission mechanism and the magnitude of impact of the crisis on industries in East Asia. The analyses reveal that the crisis significantly affected industrial output of the nine East Asian countries. In particular, the countries which are deeply involved in production networks were affected most seriously. Moreover, the analyses show that the impact was transmitted to East Asian industries considerably through the “triangular trade”, in which China imports parts and components from neighboring East Asian countries and then exports final products to the U.S. and EU markets.

The Taiwan Strait Crisis of 1954-55 and U.S.-R.O.C Relations

On September 3, 1954, Chinese artillery began shelling Quemoy (Jinmen), one of the Kuomintang-held offshore islands, setting off the first Taiwan Strait Crisis. This paper focuses on the crisis and analyzes the following three questions: (1) What was the policy the U.S. took towards the Republic of China (R.O.C), especially towards the offshore islands, to try to end the Taiwan Strait Crisis? (2) What were the intentions of the U.S. government in trying to end the Taiwan Strait Crisis? And (3) how should U.S. policy towards the R.O.C. which led to solving the Taiwan Strait Crisis be positioned in the history of Sino-American relations? Through analysis of these questions, this study concludes that the position the U.S. took to bring an end to crisis, one which prevented China from “liberating Taiwan” and the Kuomintang from “attacking the mainland,” brought about the existence of a de facto “two-China” situation.

Tax differentials and inflow of foreign direct investments : evidence from foreign operations of U.S. multinational companies

This paper concerns the measurement of the impact of tax differentials across countries on inflow of Foreign Direct Investment (FDI) by using comprehensive data on the foreign operations of U.S. multinational corporations that has been collected by the Bureau of Economic Analysis (BEA), the U.S. Department of Commerce. In particular, this research focuses on examining: (1) how responsive FDI locations are to tax differentials across countries, (2) how different the tax effect on FDI inflow is between developed and developing countries, and (3) whether investment location decisions have become more or less sensitive to tax differences between countries over time ranging from the late 1990s to the early 2000s. Estimation results suggest that high rates of corporate income taxation are associated with reduced foreign assets of U.S. multinational firms in all industries by decreasing the return to foreign asset investment. Further, foreign assets of U.S. multinationals in all industries have become more responsive to non-income tax differentials across countries than to income tax differences from 1999 to 2004. Empirical estimates also indicate that foreign investment by American firms is associated with higher tax sensitivity more in developed countries than in those that are developing.