Change in the transition of the fertility rate

This paper presents an investigation of the effects of child care service on the fertility rate. Results of our analyses show that the price of child care service plays important roles on the fertility and that a positive relation is not robust between fertility and income.     

Boom and Bust Cycle of the Stock Market, and Economic Growth in a Vintage Capital Model

We construct a growth model of overlapping generations with vintage capital. There exists an equilibrium that converges to the balanced growth path through endogenous fluctuations of investment, consumption, and output in terms of the growth rate. When the technological change arrives and a rise in productivity is embodied only in newly invested capital, the economy converges to a new balanced growth path with a higher growth rate of output, but when we interpret the price of existing old capital as the stock market capitalization, the rise in productivity is accompanied by an initial decline in the stock market. Oscillatory equilibria are supported as perfect-foresight equilibria in the present framework with finitely lived agents and capital. Any oscillatory equilibrium is associated with the regime switch from an economy with both young and old capital in use into one with only old capital in use.     

HOW LONG SHOULD WE STAY IN EDUCATION IF ABILITY IS SCREENED?

We examine how ability‐screening affects demand for education and the shape of an optimal education system. Explicitly incorporating gradual screening by education into the model, we illustrate how individuals of different abilities decide to stay in education or drop out. Gradual screening induces low‐ability individuals to receive over‐education, reducing the net benefit obtained from education by society as a whole, as well as such individuals. A mixed education system, in which public education is provided before private education, is superior to a wholly private system, in terms of both efficiency and equity, because it reduces the over‐education of low‐ability individuals.     

Market Entry,Capacity Choice,and Product Differentiation in Duopolistic Competition under Uncertainty

This paper examines the impact of pre‐emptive competition for a leader's position on the investment strategies for market entry, production capacities, and product differentiation. In the absence of pre‐emptive competition, the leader's production capacity exceeds the follower's, and the leader earns excess returns. In contrast, in its presence, the leader's production capacity decreases below the follower's, and the follower's investment value exceeds the leader's when the follower enters the market. These results suggest the new insight that pre‐emptive competition provides the opportunity for the follower to expedite investing and to enhance investment value by capitalizing on the leader's insufficient capacity. Copyright © 2013 John Wiley & Sons, Ltd.     

Land tax and economic growth under credit market imperfection

We study the general equilibrium effects of land taxation on economic growth by extending the model developed by Kiyotaki and Moore (1997) to an endogenous growth model, where land is used not only as an input of production but also as collateral. Land taxation tends to hamper economic growth through the credit-contraction effect, but the overall direction on economic growth depends on the redistribution scheme of the tax revenue. Surprisingly, we show that if the tax revenue is fully refunded to entrepreneurs, the economy grows faster than a no-taxation economy. We calibrate our model and show that if taxation on land is raised by 1 percent, the land price initially falls by approximately 9.09 percent, while the economy grows faster by 0.6%.     

Long-run Growth and Intragenerational Transfer Under Capital Market Imperfections

The purpose of this paper is to provide a long-run growth model linking growth to income distribution between lenders and borrowers in an environment where enforcement of loan contracts is imperfect. The equilibrium under costly verification implies a smaller growth rate, relative to the symmetric-information economy. Intra-generational transfer of income is shown to promote growth so long as the redistribution gives rise to an increase in net worth positions of borrowers.
JEL Classification Numbers: G21, O16, O40     

Redistribution Policies under Capital Market Imperfection

We establish the existence and stability of the long‐run wealth distribution in a credit constrained economy by applying the monotonicity condition developed by H. Hopenhayn and E. Prescott. There should emerge an egalitarian society in which all families experience upward and downward mobility, although a society of persistent inequality may occur in which rich entrepreneurs and poor lenders remain immobile between classes. The speed of transition from the latter to the former is shown to depend on the design of redistribution policies. Simulation results show that this occurs more rapidly when the government favours relatively rich lenders. JEL Classification Numbers: D31, G33, O12.     

Bank's capital structure under non-diversifiable risk

Summary. The aim of this paper is to study the design of optimal capital structure of a “large” intermediary when the intermediary faces a non-diversifiable risk, within the standard costly-state-verification (CSV) model. I demonstrate that, under weaker conditions, a “large” intermediary realizes more efficient allocation by issuing both debt and equity than by issuing only debt. Unlike Diamond (1984) and Williamson (1986), the set of optimal contracts involves ex ante monitoring made by shareholders of the intermediary. Changes in parameters, such as the variance of the aggregate risk or the cost of monitoring, affect bankruptcy costs and the capital structure. Received: October 12, 1998; revised version: March 20, 2001     

Land-Tax, Transfer and Growth in an Endogenously Growing Economy with Overlapping Generations

In this paper we investigate the effect of a tax on land rent on the growth rate of capital in a growing economy with overlapping generations. A tax on land rent has a potential to increase the growth rate of capital. If the model is extended to allow the tax revenue to be refunded to individuals, a tax on land rent may deter growth to the extent that the tax revenue is transferred to the older generation.
JEL Classification numbers: H31, O41.