Abstract
In Japan, research into international values has been conducted vigorously since the latter half of the 1940s. From a global perspective, studies that emphasize demand factors in the determination of international values have been dominant; however, this has not been the case in Japan. Neoclassical studies of this subject have not been as vitalized. Rather, many of the studies have succeeded the works of Ricardo, Marx, Graham, and Sraffa who placed a high priority on supply factors in the determination of commodity prices. Research on this topic is divided roughly into two periods owing to its contents and characteristics. One is the period until the 1980s and the other is that since the 1990s. Research in the first period was chiefly carried out by Marxian economists, and that in the second period, based on Graham and Sraffa, has led to the birth of the new theory of international values developed in this book. In this chapter, we provide an overview of research into international values in Japan. In addition, we explain Graham’s relatively unknown theory of international values and show the fundamental structure of the Graham-type model (a modified version of Graham’s original model and a multi-country multi-commodity Ricardian trade model). Furthermore, we present a way in which to derive an equilibrium solution of this model practically.
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Notes
- 1.
Marx (1887, p. 396). The following quotations from Marx are on the same page.
- 2.
- 3.
Although most researchers did not give a quantitative definition of national productivity differentials, a number of them, we think, adopted the second standpoint, as Japanese Marxian economists believed that demand was never involved in the determination of values. Exceptionally, Kihara (1986) adopted the first standpoint and Yukizawa (1957) the third.
- 4.
There was criticism of the theory by Marxian economists. Sasaki (1989) pointed out that it was fundamentally impossible to average the productivity differentials of different sectors, while Motoyama (1982) wrote that we could never know the productivity level of the car industry in developing countries.
- 5.
- 6.
See Negishi (1982, p. 202).
- 7.
Although Negishi (1982) did not exclude the case in which one country produces two commodities, we omit it here to explain the case.
- 8.
- 9.
McKenzie (1954a) presented a mathematical treatment for Graham’s model, and McKenzie (1954b) tried to prove the existence and uniqueness of the equilibrium solutions in the model. Shiozawa (2014), however, indicated that the proof was wrong because the demand functions assumed by McKenzie were different from Graham’s (p. 290).
- 10.
See von Mangoldt (1975).
- 11.
- 12.
Graham refers to the case of variable opportunity costs too and indicates that the number of commodities produced in common in more than one country would grow under the increasing opportunity costs (Graham 1948, pp. 146–151).
- 13.
Graham is not indifferent to the problem. For example, he writes that national prosperity (per capita income or wage rate) is a function of two variables, per capita physical productivity and the terms of trade, and the former is more important (ibid., p. 50, pp. 212–213, p. 233). He also refers to money wages (ibid., p. 261, p. 307).
- 14.
- 15.
About this research stream, see Sect. 2, Chapter “Analysis of Production Efficient Patterns of Specialization Allowing Intermediate Inputs: The Meaning of Shiozawa's Model with a Viewpoint of Modern Economics” of this book.
- 16.
See Sect. 4 for the reason.
- 17.
See Shiozawa (2014, p. 372). If M and N are large, it is very difficult even to identify the reasonable patterns. Including the rest of the process, the support of computer program would be needed in order to calculate actually.
- 18.
Although the number of conditions (therefore, equations) is N, one is invalid owing to Walras’ law.
- 19.
The number of the reasonable patterns is ∑(M + N − l − 2)!/{(M − l − 1)!(N − l − 1)!l!}(l = 1, 2, …, M − 1), where l is the number of disconnections (suggested by the description of Shiozawa, 2012, p. 50).
- 20.
- 21.
However, his numerical example to show the invalidity of the theorems was in fact wrong, since the example did not satisfy the condition that there is no factor intensity reversal. Kurose and Yoshihara (2016) indicate this and give a correct example to show the invalidity of the theorems.
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Acknowledgment
We would like to thank Kazuhiro Kurose for his useful suggestions and helpful comments.
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Sato, H. (2017). An Overview of Research into International Values in Japan. In: Shiozawa, Y., Oka, T., Tabuchi, T. (eds) A New Construction of Ricardian Theory of International Values. Evolutionary Economics and Social Complexity Science, vol 7. Springer, Singapore. https://doi.org/10.1007/978-981-10-0191-8_10
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