Cultural differences in perceptions of environmental problems

A comparative survey study of environmental perceptions and beliefs was conducted in Japan and in two New York State countries in 1974. While the samples and the instruments were not strictly comparable, there was sufficient comparability to compare perceptions about the seriousness of the environmental problem, perceptions of the quality of various environmental elements, the definition of the environmental problem, the causes of the environmental problem, attitudes toward governmental action to solve environmental problems, and citizen activity with respect to the environmental problem. Some general findings are that the definition of the environmental problem is culture bound. That we cannot expect people to support strong environmentally protective actions by governments until they perceive a clear and present danger. That if people perceive environmental damage to be caused by the social, economic, and political system, they will look to the system for the solution and will take little personal action to alleviate the problem. We had held a hope that mankind might take a more thoughtful and planned approach to a new environmentally protective social order; this hope received little encouragement from what we have learned in this study.     

Environmental Policy in the Presence of Induced Technological Change

We examine the hypothesis that induced technological change (ITC) can dramatically lower the cost of a carbon tax in a static optimal tax model. The research and development sector is represented by an aggregate stock of energy-saving technology, which acts as a weak substitute with a polluting resource in the energy generation sector. Using this model, we analytically show how ITC occurs and affects the cost of a carbon tax. Applying quantitative estimates of the size of ITC to numerical simulations calibrated to the US economy, we find that existing empirical evidence can reduce the welfare cost of environmental tax reform by 12%. Our tests of alternative parameters show that this result is highly sensitive to the assumptions used, suggesting that ITC could result in much larger reductions in cost.     

Efficiency in a search and matching model with training costs

This paper studies the efficiency of the search and matching model with training costs. I incorporate productivity enhancing firm-specific skill training into the search and matching model of Pissarides (2000). I demonstrate that while the decentralized economy can be efficient if training costs are not sunk at the time of wage determination, the decentralized economy is not efficient due to a hold-up problem if training costs are sunk.     

“Down-Side Risk” Probability Minimization Problem with Cox-Ingersoll-Ross’s Interest Rates

With a bank account and a risky stock, both of which are affected by Cox-Ingersoll-Ross’s interest rates, we treat two “down-side risk” minimization problems of the large deviation probability for long-term investment. Explicit solutions of the problems are given by solving the associated risk-sensitive portfolio optimization problems.     

Does fiscal policy really matter in the context of variable prices?

Blinder and Solow's crowding-out analysis is extended by allowing wealth effects of debt accumulation on both aggregate demand and aggregate supply. Two questions are reexamined; (1) the compatibility relationship between the long-run stability and the sign of the instantaneous money and bond multipliers, and (2) the long-run relative expansionary effect of bond financing. Without capital accumulation, real crowding-out may become compatible with stability under both money and bond financing, while nominal crowding-out is not. Normally, this is also true with capital accumulation. Furthermore, bond financing is not necessarily more expansionary than money financing in either real or nominal terms.     

Repetitive Advertising to Deter Entry

This paper develops a model in which advertising not only informs consumers of brands, but also can influence consumer brand choices through its repetition. By examining a multi‐stage game in which two firms sequentially advertise before simultaneously setting a price, we show that repetitive advertising can be a legitimate entry‐deterrence weapon available to an incumbent in subgame perfect equilibrium. This demonstrates that firms’ conduct of advertising repetition has anticompetitive implications.     

Balance sheet identity and Walras' Law

The balance sheet identity is interpreted to imply that if n ? 1 of n assets are in stock equilibrium, so is the remaining asset. Under the notion of the end-of-period equilibrium, the following are shown. (1) This interpretation leads to the contradiction that the system does not allow enough independent equilibrium relations to determine uniquely the equilibrium values of its endogenous variables. (2) The balance sheet identity is equivalent to Walras' Law in flow form. Thus, Foley's methodological precept is verified; transforming a period model into its continuous time analogue does not lead to different outcomes from period analysis.     

The Permanent Income–Life Cycle Hypothesis in a Monetary Economy and the Neutrality of Money: A Continuous-Time Analysis

This paper addresses the viability of the permanent income– life cycle hypothesis in a monetary economy in which money enters the utility function of infinitely lived agents. Two forms of the hypothesis are distinguished: weak and strong. Deriving the Keynes–Ramsey rule of consumption under preferences of the Uzawa–Epstein recursive class and examining the optimal consumption–wealth relation, the paper studies the restrictions that these forms impose on the utility functional, identifies the necessary and sufficient conditions for the hypothesis to hold, and clarifies how such conditions are related to the neutrality of money.
JEL Classification Numbers: D91, E21, E40, C61.