Factor-Market Distortions, Dynamic Stability, and Paradoxical Comparative Statics

In the late 1960s and early 1970s there was a strong revival of interest in the role of factor-market distortions in those branches of our subject which rely on the Lerner–Samuelson two-by-two model of production. Among the legacies from that period were several comparative statical propositions which seemed counterintuitive or paradoxical. However, the revival lost momentum when confronted with Neary's observation that the major paradoxes are associated with unstable equilibria and therefore rarely observed. On the other hand, there are now seen to be several errors in Neary's analysis. For example, in the important case of a closed economy (and, by interpretation, in the case of a large open economy) he overlooked the fact that paradoxes can be associated with stable equilibria.     

Evaluation of the MEMM, Parameter Estimation and Option Pricing for Geometric Lévy Processes

In this paper, we shall propose a useful approach to evaluate concretely the MEMM (minimal entropy martingale measure) for the typical geometric Lévy processes such as compound Poisson, stable, VG (Variance Gamma), CGMY (Carr-Geman-Madan-Yor), NIG (Normal Inverse Gaussian), etc. In addition, we shall estimate the parameters of geometric Lévy processes and value the European call option and Asian call option using the Nikkei financial data.     

Social Network Rebuilder: A Tool to Estimate a Social Network of Financial Crisis Propagation

The objective of this paper is to find a new method to estimate real social networks based on observed data collected by questionnaire surveys. Studies on social networks have been increasing in order to analyze social phenomena from a micro viewpoint. Most social phenomena can be explained by micro-level interactions among people. Spread of rumor and pandemics are typical example of micro interaction? However, there has not been much work on an analysis of real social networks based on observed data. This study tries to establish a methodology that exploits a genetic algorithm to rebuild a social network based on the data observed indirectly from real social networks. This paper introduces our proposed method, which allows us to rebuild a social network to some extent from degree distributions of a target real social network.     

Sustainability or Ruin of a Common Resource Economy with Random Jump

We consider a common resource economy in which agents exploit the common resource, and use it to produce goods and consume the goods produced. Also the agents can invest in private and productive capital. The resource extracted from the common resource is non‐renewable and the common pool is under uncertainty in the sense that it could have a sudden increase or decrease in the course of extraction. In this model we shall explore the probability of sustainability or ruin of the economy. We compare and discuss the optimal extraction rules and the probabilities under cooperative and non‐cooperative regimes.     

Founders’ human capital and external knowledge sourcing: Exploring the absorptive capacity of start-up firms

ABSTRACT

This study highlights the importance of founders’ human capital on firms’ absorptive capacity for explaining the external knowledge sourcing (licensing-in and joint R&D) of start-up firms, using panel data from original questionnaire surveys conducted in Japan. The results of a probit model with an endogenous regressor show that firms managed by founders with a high level of specific human capital, measured as prior innovation experience and industry-specific work experience, tend to engage in external knowledge sourcing because of their superior absorptive capacity. The findings indicate that this type of human capital also promotes research and development (R&D) investment. Contrariwise, this study finds that firms managed by founders with a high level of general human capital, measured as educational attainment, tend to invest more in R&D, which enhances their absorptive capacity and thereby promotes external knowledge sourcing. Finally, the implications of these findings are discussed from the perspective of public policy.     

Optimal Taxation of Elderly Care Services

This paper explores optimal taxation of market purchases of an elderly care service, which can also be produced in the home. Home production cannot be taxed. If children discount parents' utility relative to their own utilities, an intergenerational externality arises in the family. When home production of the service is significant, the optimal tax rate on market purchases should be: (i) high , if the service and leisure are complements and the externality is strong, (ii) low , if they are substitutes , irrespective of the degree of the externality.     

A reconciliation between equity and efficiency in public goods economy

Journal of Economics -     

R&D investment of start-up firms: does founders’ human capital matter?

This article examines whether founders’ human capital affects not only actual investment but also required investment in research and development (R&D), using the original data of Japanese start-up firms. The estimation results indicate that higher levels of founders’ human capital, especially their education levels, increase both actual and required investment in R&D and thus do not necessarily contribute to reducing the funding gap for R&D.