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No.35
No.35 ,Economy  Oct 20, 2016

Will Pokémon GO increase investment?

Yanagawa Noriyuki, Professor, University of Tokyo

Pokémon GO” is a hot topic. Although there are a number of very interesting ideas for discussion related to this app, this essay will discuss the issue of future investment demand using the game as a starting point. In the past, when game software releases have been the focus of major attention, this has led to major increases in demand for hardware such as game consoles. As a result, capital investment demands for expansion of factories and other infrastructure also increased. However, in the case of apps that run on smartphones, a huge number of people already possess these devices. For this reason, demand for new hardware and the capital investment that goes along with it both barely increase at all. Although there has been a certain amount investment demand during the development stage, app development can... [Read more]

No.34
No.34 ,Economy  Oct 15, 2016

Perspective on the Problems of Foreign Labor: Enacting Employment Policies That Encourage Long-Term Residence
― Improvements in Ability Development and Handling are Essential

Key Points : 1. 80% of foreign workers enter the country with different qualifications than a job title. 2. Due to the economic growth of developing countries, the appeal of working in Japan is on the decline. 3. l An employment policy that requires foreign workers to return to their home countries without exception is not necessarily in Japan’s best interest. There have been frequent discussions regarding the acceptance of foreign workers both in governmental offices and among the Diet members. The “Choose the Future” Committee, organized by the Council on Economic and Fiscal Policy, has taken a leading role. In the minutes from the first meeting, although utilization of immigrants has become an issue for consideration in light of the declining birthrates in Japan, once discussion turns to acceptance of immigrants, the tone of the discussion declines, and the topic changes to “utilization of the skills of foreign workers” and “accepting foreign labor.”... [Read more]

No.34
No.34 ,Economy  Sep 26, 2016

Where have integrity and modesty gone in the policy decision-making process?
Residual Problems in Japan’s Democratic Government Stemming from The Second Postponement of The Consumption Tax Hike

Saito Makoto, Professor of the Faculty of Economics, Hitotsubashi University

The grounds for the first postponement of the consumption tax hike in November 2014 and the latest postponement are complete, and each will have an entirely different impact in the future. Nobody welcomes the raising of consumption taxes. While it is true that postponing the hike ensures victory in elections, the loss caused by this action is far too great.... [Read more]

No.32
No.32 ,Economy  Jun 13, 2016

Why Japanese-style Employment Systems Hamper the Success of Women

Yamaguchi Kazuo, Ralph Lewis Professor of Sociology, University of Chicago

At the initiative of the Abe administration, a draft “Act on the Promotion of Success in the Working Careers of Women” (provisional title) will be submitted to the National Diet. While the viability of the bill is uncertain, its intent is sound, and the fact that the administration decided to set numerical targets against protests from Japan’s Keidanren is also commendable. Having each company set figures based on actual circumstances is an unavoidable measure because an insufficient number of female human resources have been cultivated to date, and because setting a quota is not a rational economic move. Instead, we need to visualize the numerical targets and possible outcomes, have each company establish the targets they plan to attain, and make their achievements transparent. The problem, however, is that the main reason the contributions of women in Japanese economic activity have not advanced lies in the Japanese employment system.... [Read more]

No.32
No.32 ,Economy  Jun 09, 2016

The Rapid Increase of Elderly Single Households and the Declining Marriage Rate
― Social System Rebuild Inevitable

FUJIMORI Katsuhiko, Chief Research Associate, Mizuho Information & Research Institute, Inc.

Single-person households are on the rise. Living alone is no longer a phenomenon peculiar to young people. The numbers of elderly people living alone after losing their spouses or unmarried senior males living on their own have been growing rapidly. The dramatic rise in the number of single-person households is perceived as an astonishing phenomenon in Japanese society, where a married couple living together with their family has long been seen as “standard.” Astonishing as it may seem, the growing number of people living alone also reflects a shift towards more diversity in the lifestyles of individual people and the way a family functions. Historically, Japan’s care system has been based on the idea of family involvement, in which the caregiver is a family member. The benefits of mutual encouragement within a family have traditionally ... [Read more]

No.33
No.33 ,Economy  Jun 05, 2016

Interview:
Preventing Deflationary Pressure from Flaring Up Again
― Investors Placing Funds in Assets Other Than Government Bonds

IWATA Kazumasa, President of the Japan Center for Economic Research (JCER)

--- The Bank of Japan (BOJ) has decided to lower the interest rate imposed on a portion of the money private banks deposit in current accounts at the BOJ to negative 0.1%. What is your take on this decision by the BOJ?
IWATA Kazumasa: Inflation expectations are declining, and there is an increasing risk of deflationary pressure mounting again in Japan. Markets are also losing their stability against the backdrop of the economic slowdown in China and other countries, the declined value of the renminbi, and low crude oil prices. There was a risk that Abenomics would suffer a reversal if things were left as they were. The BOJ decision can be seen as a move to put the brakes on these risks and prevent deflationary ... [Read more]

No.32
No.32 ,Economy  Jun 05, 2016

The Making of an
Intellectual Property-based Nation

Japan’s latest Intellectual Property Promotion Plan spells out the government’s determination to promote the utilization of regional intellectual property to support SMEs and to reduce and more efficiently resolve rights disputes. In July 2002, the Japanese government drew up an Intellectual Property Policy Outline with a view to making Japan an “intellectual property-based nation.” The policy placed a strategic emphasis on innovation and “the creation of valuable information” such as technology, design and content. The following July, the newly established Intellectual Property Strategy Headquarters announced the first Strategic Program for the Creation, Protect ion and Exploitation of Intellectual Property, explaining the background to the Program as follows: There are various factors behind the significant decline recently in the international competitiveness of Japanese industry, which had held the top rank in the world until the beginning of the 1990s. One of these factors is that ... ... [Read more]

No.32
No.32 ,Economy  Jun 05, 2016

Will Japan’s Labor Shortage Worsen?
Overstaffing May Resurface If Problems Are Left Unaddressed

YAMADA Hisashi, Chief Economist, Head of Economics Department, the Japan Research Institute, Ltd.

An examination of the causes of Japan’s current labor shortage reveals that it is too early to conclude that a society with a shrinking population directly causes the problem to worsen. The shrinking population has been identified as an underlying factor to Japan’s rising labor shortage in recent years. However, Japan’s labor force population (the combined population of employed and unemployed people aged 15 or older actively seeking full-time work) reached its peak nearly fifteen years ago. This fact indicates that even though the labor supply is shrinking, a surplus of personnel was considered to be a problem up until a little more than a year ago. The quick turn in the labor situation is a direct result of changes in economic conditions. Until recently, the Japanese economy was still stagnant, the drop in the demand... [Read more]

No.32
No.32 ,Economy  Jun 05, 2016

Investing in Japan

Incentivized by the economic policies of the Abe administration, the weaker yen and a sharp increase in the number of inbound tourists, investment in the Japanese real estate market is on the rise. A marked increase in investment in the Japanese real estate market first became apparent in the months following the election of Abe Shinzo as prime minister in December 2012. The Bank of Japan’s large-scale monetary easing in April 2013 arrested the steep rise of the previous months, as did the hike in the consumption tax in April 2014, but the general rising trend has continued through further monetary easing in October 2014 and the ruling coalition’s victory in the Lower House election of December last year. According to one private company, the turnover value of office building transactions by listed corporations and the Tokyo Stock Exchange (TSE) listed J-REITs (Japan Real ... ... [Read more]

No.33
No.33 ,Economy  Jun 05, 2016

The Bank of Japan Can Continue Quantitative and Qualitative Monetary Easing for Only Two More Years: The Adoption of Negative Interest Rates Is Proposed
– Eliminating the Zero Lower Bound is Crucial

IWATA Kazumasa, Japan Center for Economic Research (JCER) President

The Bank of Japan (BOJ) decided to put off additional easing at a meeting held at the end of October 2015 for setting a monetary policy. In my opinion, whether or not the BOJ takes such a step depends on whether market participants’ inflation expectations fall sharply. The important thing here is the natural rate of interest. It is an equilibrium real interest rate that is neither stimulative nor tightening for the economy (in other words, neutral for the economy). According to analysis by the Financial Research Team of the Japan Center for Economic Research (JCER), the natural rate of interest for Japan fell below zero in the mid-1990s. The rate was around negative 0.5% in the latest period. (Refer to Figure 1.)... [Read more]

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