Research

Abstract: 

Abstract: Large exchange rate appreciations pose a fundamental challenge for open economies: they compress export margins, weaken competitiveness, and force firms and regions to adjust their production and employment structures. However, evidence on how such adjustments unfold over the long run remains limited. This paper studies these mechanisms using Japan’s sharp yen appreciation following the 1985 Plaza Accord. Combining a firm-level panel data from 1980 to 1999 with industry-level shock exposure, I estimate how appreciation affected firms’ employment, sales, and labor productivity. The results show sharp declines in sales and productivity but modest employment losses, reflecting Japan's rigid labor practices. Industries more exposed to export shocks expanded FDI in Asia, stabilizing domestic employment but lowering labor productivity. At the regional level, labor reallocation from manufacturing to services occurred in shock-exposed regions, suggesting that the yen appreciation led to gradual structural transformation.

Kanematsu Prize in 2026, 18th FIW Young Economist Award 2026

Abstract: Why do elite families often maintain their social and economic status across generations? This paper examines the role of adoption in sustaining elite persistence in prewar Japan. Under the Japanese inheritance system, families without a biological son could adopt an heir to continue the family lineage and transfer assets and social status. Using novel father-heir linked data constructed from the Personnel Inquiry Records (1903–1939), we compare elite outcomes between biological and adopted heirs. We find that adopted heirs were substantially more likely to remain elite and to reach the extreme upper tail of the income distribution than biological heirs. The results are robust to family, regional, occupational, and educational controls. Overall, the findings suggest that adoption functioned as an institutional mechanism that expanded the pool of potential successors beyond biological lineage, thereby strengthening intergenerational elite persistence in prewar Japan.