On the asymptotic behavior of the prices of Asian options

In this paper, we study the price of a long term Asian option the pay-off of which is determined by the average price of the underlying asset during the last fixed number of days of its life. As one can imagine, it converges to the price of a plain vanilla option as the time to maturity increases. We explicitly obtained the asymptotic difference which will be useful for computing the price of Asian option in practice.     

Ergodic chaos for non‐expansive economic models**

Ergodic chaos is one of the most important concepts in the theory of nonlinear economics. Due to the lack of appropriate sufficient conditions, its reach has not been fully understood. In this paper a sufficient condition for ergodic chaos that covers non‐expansive dynamical systems is examined. By analyzing an endogenous growth model as an example, we discuss the breadth of models in which ergodic chaos can emerge.     

Trade liberalization,division of labor and welfare under oligopoly

Incorporating explicitly division of labor into a two-country general oligopolistic equilibrium model, we examine the effects of trade liberalization on firm productivity and welfare. We show that a tariff reduction increases the firm productivity of the trading industries but decreases that of the non-trading industries. An expansion of the trading industries, in contrast, decreases the firm productivity of both the trading and non-trading industries. We then find that a tariff reduction necessarily reduces welfare while the welfare effect of expansion of trading industries is ambiguous.     

The Books of Crisis and Tooke–Newmarch excerpts: a new aspect of Marx's crisis theory in MEGA

Abstract

The paper explores a new aspect of the development of the Books of Crisis: the fact that Marx’s empirical research on the 1857 crisis in these notebooks was undertaken as the direct continuation of his study of Thomas Tooke and William Newmarch's A History of Prices. Our investigation will provide clues to better understand the structure and contents of the documents. Particularly, we provide new evidence for why Marx started his research on the 1857 crisis with the French economy, which managed to steer clear of the crisis, rather than with England, which was already acutely affected by it.     

Legal migration and illegal migration: the effectiveness of qualitative and quantitative restriction policies

By considering the optimal behaviour of illegal mi grants who must confront the various enforcement techniques adopted by the host country, we show that an increase in penalties, in travel cost, or in the possibility of detection, would be effective in the 'qualitative ' objective but not in the 'quantitative' objective. Moreover. when a host country starts accepting skilled legal migrants, if the required skill level is relatively low and the possibility of detection is sufficiently high , an increase in penalties will be effective in both objectives.     

Losses from competition in a dynamic game model of a renewable resource oligopoly

This article develops a dynamic game model of an asymmetric oligopoly with a renewable resource to reconsider welfare effects of increases in the number of firms. We show that increasing not only the number of inefficient firms but also that of efficient firms reduces welfare, which sharply contrasts to a static outcome. It is discussed that the closed-loop property of feedback strategies plays a decisive role in this finding.     

A theory of international currency: Competition and discipline

We explicitly consider strategic interaction between governments to study currency competition and its effects on the circulation of currencies and welfare in a two-country two-currency search-theoretic model. Each government finances public goods by means of seigniorage. Compared with a regime with two local currencies, a regime with one international currency allows the issuer of the international currency to reduce the inflation tax while collecting more seigniorage, and forces the other issuer to raise the rate to compensate for a diminished tax base. However, the country with a local currency is sometimes constrained by an inflation discipline: the more open a country is, the stronger is the discipline. Strategic selection of equilibrium gives rise to a further inflation discipline: the larger country tries to have its currency circulate abroad, while the smaller country tries to prevent the circulation of Foreign currency.     

Pasinetti after Sen: Towards a Capability Approach to Structural Dynamics of Consumption

Pasinetti's theory of structural dynamics has, as well as the capability approach, normative implications about income distribution and economic growth. Compared with the latter, however, the individual character of consumption is rather neglected in Pasinetti's framework, but the macro‐economic viability is examined here more intensively as a main issue. In this paper, we will show it possible and fruitful to consistently integrate both complementary approaches and present an analytical foundation of a normative theory of the structural dynamics of consumption.     

A dynamic linear economy with characteristic-based endogenous technical coefficients

We develop a characteristic-based model for the endogenous determination of technical coefficients in a linear economy and use it to describe the dynamics of the economy as driven by changes in knowledge. The use of the characteristic approach to determine technical coefficients makes our model suitable to be interpreted as a first attempt towards the formulation of a formal knowledge-based model of technology.