The impact of economic uncertainty and financial stress on consumer confidence: the case of Japan

PurposeThis study explores the response of consumer confidence in policy uncertainty in the Japanese context. The study also considers the dynamism of stock market behavior and financial stress and its impact on consumer confidence, which has remained unaddressed in the literature. The role of these control variables has important implications for policy discussions, particularly when other countries can learn from Japanese experiences.Design/methodology/approachThe nonlinear autoregressive distributed lag model postulated by Shin et al. (2014) was used for studying the asymmetric response of consumer confidence to policy uncertainty. This method has improved estimates compared to traditional linear cointegration methods.FindingsThe findings confirm the asymmetric impact of policy uncertainty on the consumer confidence index in Japan. The impact of the rise in policy uncertainty is greater than that of a fall in asymmetry on consumer confidence in Japan. Furthermore, the Wald test confirmed asymmetric behavior.Originality/valueThe contribution of this study is threefold. First, this study contributes to the extant literature by analyzing the asymmetric response of consumer confidence to policy uncertainty, controlling for both the financial stress and stock price indices. Second, to test the robustness of the exercise, the study utilized different frequencies of observations. Third, this study is the first to utilize the concept of Arbatli et al. (2017) to formulate a combined index of uncertainty based on economic policy uncertainty index, along with uncertainty indices such as fiscal, monetary, trade and exchange rate policies to study the overall impact of policy uncertainty.

The Similarity between Species Composition of Vegetation and Soil Seed Bank of Grasslands in Inner Mongolia, China: Implications for the Asymmetric Response to Precipitation

The asymmetric response of productivity to precipitation was recently proposed as an early warning signal for the shifts in temperate grassland function in China. It was hypothesized that the asymmetry was influenced by the increased growth of the newly emerged seedlings from the soil seed bank. Therefore, the seed density in the soil seed bank and the similarity between species composition of the vegetation and the soil seed bank should be maximized where asymmetry was maximized. However, this knowledge was still limited and unconfirmed. In this study, the desert steppe, typical steppe and the transition zone between them (with the highest asymmetry) were selected for studying the similarity index in both 2018 (dry year) and 2019 (wet year). Plant species composition was monitored in situ using an unmanned aerial vehicle. Soil seed bank samples were collected, and the seed bank density and species composition were then examined and identified in the laboratory. Results showed that: (1) The variation in vegetation species richness between the two years was the highest (41%) in the transition zone (p < 0.05), while it was only 7% and 13% for the desert steppe and typical steppe, respectively. The presence of herbaceous species mainly caused the differences in variation among three grassland types. (2) Seed density was the highest in the transition zone (114 seeds/m2 and 68 seeds/m2 in the transient and persistent soil seed bank, respectively) (p < 0.05). Additionally, herbaceous species were the main components of the soil seed bank. (3) The similarity index was the highest in the transition zone (p < 0.05), with 38%/44% and 33%/44% for the transient/persistent soil seed bank in 2018 and 2019, respectively. Our study demonstrated that variation in vegetation species composition was very similar to the composition of the seeds accumulated in the soil seed bank. These results warrant further investigation for the mechanism of asymmetric response of productivity to precipitation.

An Asymmetric Strategy for US-China Competition

Chapter 13 outlines a US response to China’s ambitions for displacing the United States from regional and global order. This approach would address the China challenge not through changing China’s internal political structure or reassuring it through a grand bargain, but by limiting China’s ability to convert its power into regional and global order. Given the scale of China’s challenge, the United States needs an asymmetric response, one that strengthens the “forms of control” upon which American order depends while undermining those that Chinese order will soon require. It shows how the United States can avoid competing dollar-for-dollar, ship-for-ship, or loan-for-loan by adopting an asymmetric approach that blunts Chinese advances at lower cost than China expends in generating them, all while reinvesting in the sources of American order that generate disproportionate advantage relative to the costs of maintaining them. The chapter discusses military, political, and economic components of these asymmetric approaches.