Time preference and two-country trade

We present a dynamic two-country model of international trade with endogenous time preference. We show that if the two countries have similar preferences, production technologies and labor endowments, there exists a unique and stable steady state such that both consumption and investment goods are produced in both countries. Unlike the case of constant time preferences, the steady state is independent of the initial international distribution of capital. We prove a dynamic Heckscher–Ohlin theorem such that the labor-abundant country exports the labor-intensive good.     

Integrative diversification of wellness tourism services in rural areas – an operational framework model applied to east Hokkaido (Japan)

A framework model for wellness tourism development in rural areas is developed in this paper, combining the concepts of integrative diversification, tourism product development, and an endogenous approach to innovation dynamics. Three spatial levels of wellness services are considered (establishment, destination, and the region where they are located) in order to identify the required resources, services to develop, stakeholders to involve, and a process to match the supply and demand in wellness tourism. The paper concludes with an exploratory application to the case of east Hokkaido (Japan), identifying crucial challenges for a diversification of wellness services based on the traditional onsen practices.     

Endogenous business cycles in a perpetual youth model with financial market imperfections**

An economy in which entrepreneurs and financiers interact with each other through an imperfect financial market is investigated by applying a dynamic general equilibrium theory. In each period, there is a certain probability of each entrepreneur's life ending, and a certain number of entrepreneurs are newly born. Although entrepreneurs are potential capital producers, they receive an idiosyncratic productivity shock in each period. Therefore, entrepreneurs who draw higher productivity become capital producers and those who draw lower productivity become lenders. Financiers do not have an entrepreneurial talent for capital production, and thus they lend their assets in the financial market to acquire an interest income. In equilibrium, deterministic endogenous business cycles can occur at the intermediate level of financial constraints.     

ZERO NOMINAL INTEREST RATES,UNEMPLOYMENT, EXCESS RESERVES AND DEFLATION IN A LIQUIDITY TRAP

We present a dynamic monetary model that consistently explains various phenomena such as unemployment, deflation, zero nominal interest rates and excess reserves held by commercial banks. These phenomena were observed during the Great Depression in the USA, the recent long‐run stagnation in Japan and the recent depression triggered by the subprime loan problem in the USA. We show that an excessive liquidity preference leads to a liquidity trap and thereby generates the phenomena.     

Growth and Welfare Effects of Monetary Expansion in an Overlapping-generations Economy

This paper studies the relation between money supply and the long-run economic growth in the context of an endogenous growth model with overlapping generations. We present detailed analyses of growth and welfare effects of monetary expansion under alternative money supply rules. It is shown that, although monetary expansion has a growth-enhancing effect in the long run, in general it is not a Pareto-improving policy. We also pay much attention to the presence of multiple equilbria in endogenous money supply regimes.
JEL Classification Numbers: E51, E62, O42.     

Production externalities and local dynamics in discrete-time multi-sector growth models with general production technologies

The present paper examines the dynamic properties of discrete-time, multi-sector growth models in the presence of sector-specific externalities. It extends the literature by allowing for multiple capital good sectors with general social constant returns production technologies. We establish conditions for the steady-state equilibrium to be locally determinate or locally indeterminate, depending crucially on the ratios of the social to private marginal products and the number of capital good sectors. We show that when the ratios of the social to private marginal products are uniform across all sectors, the steady state is always locally determinate in a two-sector model, although local indeterminacy might still arise when the economy features more than two sectors.     

Japanese Corporate Pension Plans and the Impact on Stock Prices

This study focuses on the stock market impact of Japanese corporate decisions to adopt pension plans. Implementing corporate pension plans in Japan is complicated because they are heavily regulated by the government and the traditional lump‐sum‐only severance benefit plans already exist, requiring interfacing newly adopted plans with existing ones. Using the GARCH estimation method, the market model applied in this article for the relatively long period 1975–1995 yields evidence that suggests that the stock market responds to some of the more specific characteristics of adopted plans. Alternative specifications of the pension “event” also suggest that relatively little of the market impact comes from public announcements about pension adoption occasioned by the release of a firm's financial statement.     

CONFORMISM AND STRUCTURAL CHANGE

Using a simple, multisector model of endogenous growth, we show that commodity‐specific consumption externalities can be a source of structural change. When the degrees of consumption externalities are different between goods, each sector grows at a different rate. However, the aggregate economy exhibits balanced growth in that capital stock and expenditure grow at the same constant rate. A three‐sector version of our model may reconcile Kaldor's stylized facts with empirically plausible profiles of industrial structure transformation.