Optimal money supply in models with endogenous discount factor

This paper studies the Friedman rule for the optimal quantity of money in money in the utility (MIU) and cash–credit models while considering two specifications for the endogenous discount factor. In the first specification, the discount factor depends directly on the utility level. In the second, the discount factor depends on every component of the utility function. We show that under the former specification the Friedman rule is the optimal policy. Under the latter, however, while the Friedman rule is optimal for the MIU model, it is not optimal for the cash–credit model.     

Competing incremental and breakthrough innovation in a model of product evolution

This paper develops a growth model in which product cycles arise endogenously from investment in incremental and breakthrough innovations. Incumbent firms invest in incremental technology improvements with the aim of reducing production costs. Market entrants develop breakthrough product designs in order to capture the market from vintage product lines. The competing objectives of the two types of innovation generate product cycles within an environment of creative destruction, as new products displace old and are then manufactured using production technologies that are continuously refined. Investigating the relationship between innovation incentives and the average length of product cycles, we characterized three stable patterns of product evolution: incremental innovation alone, breakthrough innovation alone, and product cycles with both types of innovation. Numerical examples suggest that when the market exhibits stable product cycles, subsidies to either type of innovation raise the rate of economic growth and improve welfare.     

Persistent income gaps in an occupational choice model with multi‐goods

In this study, we propose a theory to explain why income gaps persist. We model a simple overlapping‐generations economy with three consumption goods and two types of workers. We find that high‐skilled workers have comparative advantage in skill‐intensive jobs and low‐skilled workers in less skill‐intensive jobs. This pattern of comparative advantage determines occupational choices by workers. Combined with human capital accumulation, the occupational choices widen income gaps between families. At the same time, the relative price of skill‐intensive goods declines owing to productivity improvement. The decline holds back income gaps from exploding. The implications of skill‐biased technological change are also examined.     

Risk assessment of the flavonoids,quercetin as an endocrine modifier

Flavonoids are constituents of a wide variety of plants and are consumed in vegetables, fruits and certain medicines. They display a dual character with respect to their pharmacological effects and potential toxicity. Recent studies have demonstrated that the flavonoid, quercetin promotes estradiol-induced tumorigenesis by elevating the level of its oestrogen metabolite. Flavonoids have been also characterized as a type of environmental oestrogen. In the present study, we evaluated whether quercetin is a potential carcinogen by consideration of its oestrogenic characteristics, as described in various reports. A complete database review of flavonoids including quercetin revealed that quercetin is only mutagenic in bacterial testing systems and is a weak carcinogenic in rodents, but there has been little evidence that quercetin is tumour-inducing in humans. National Toxicology Program (1992) showed that the nonobserved adverse effect level (NOAEL) is to be less than 416 mg kg^-1 body weight day^-1 for inducing renal tumours in rats. In a study of male hamsters, it has been found that when co-administrated with estradiol, quercetin had a NOAEL of 300 mg kg^-1 day^-1 corresponding to 0.3% of the diet and contributed to the development of estradiol-induced renal tumours in these animals. By employing a 200-fold safety factor to compensate for interspecies variation, intraspecies variation and pharmacokinetics/pharmacodynamics variation, the acceptable daily intake (ADI) was estimated to be 1.5 mg kg^-1 day^-1. It was concluded that the average daily intake of quercetin exceeds this ADI value, suggesting that the risk of developing cancer from this flavonoid is not negligible given the wide exposure to quercetin in our daily life.     

Artificially Low Interest Rates as Export Promotion Policy

We reconsider the effects of a policy that sets an artificially low interest rate. Such a policy involves a combination of an interest rate ceiling and a rationing rule that assigns a priority‐lending status to export sectors over domestic service sectors. We demonstrate that the policy works as an export‐promotion policy, and improves national income. Furthermore, under some conditions, the policy expands the domestic service sector, despite the reduced amount of funds owing to the rationing rule. Finally, the artificially low interest rate improves national welfare.     

Optimal public education policy in a two sector model

Proposing a simple two sector model with occupational choice, this paper analyzes the relationship between optimal public education policy and industrial structure. Workers are employed based on their skills and education policy influences the distribution of human capital. Thus, the industrial structure determines whether an elite education policy or an egalitarian education policy is desirable. In particular, this paper indicates how the productivities of each sector and market sizes affect optimal public education policy.