Foreign equity caps for international joint ventures

We analyze foreign equity caps for international joint ventures. We develop a partial equilibrium model in which foreign equity caps are determined endogenously and find an interesting property, named a welfare indifference property i.e., maximization of domestic welfare and that of world welfare are indifferent for the host government. This property also implies that the government is indifferent to the distribution of a JV's profit.

Persistent inequality in a simple two sector model

This paper proposes a theory for the persistence of income inequality using a simple overlapping generations model with two consumption goods and two production sectors. There are two classes of workers, high and low skilled, each with a comparative advantage in a different type of production. Our model has a parameter range in which workers permanently specialize in the production type associated with their respective comparative advantages. This pattern of specialization leads to persistent income inequality, between skill classes, that is determined by the structure of demand for the two consumption goods. When the model is extended to a multi-sector framework, persistent inequality occurs under natural conditions on sector specific productivities. Finally this paper analyzes several egalitarian policies

Secured and unsecured loans in the financing activities of an entrepreneur

This paper considers an entrepreneur who potentially sets up a monopolistic firm but faces the risk of a demand shock. The entrepreneur has two possible choices for financing: he can use the capital good component of his production as collateral for a low interest secured loan or he can obtain funds through an unsecured loan that does not require collateral but charges a high interest rate. Through his cost minimization problem, the choice of financial contracts determines the marginal costs of production and the inputs of factors of production. The entrepreneur’s choice of financial loan, therefore, has a significant effect on the output market and may be detrimental to social welfare in some cases

Artificially low interest rates as export promotion policy

We reconsider the effects of an artificially low interest rate policy, which was typically implemented in Japan until the early 1970s. This policy is defined as a combination of the interest rate ceiling and rationing rules that assign a priority-lending status to export sectors; it should be distinguished from the simple interest rate ceiling. We reveal that the simple interest rate ceiling leads to credit rationing and does not increase national income, while the artificially low interest rate works as an export-promotion policy; that is, it increases exports, national income, and welfare

Advance Disposal Fee vs. Disposal Fee: A Monopolistic Producer’s Durability Choice Model

This study examines how waste disposal fee collection timing affects the durable goods producer’s choice of built-in durability under a monopoly. We categorize the disposal fee policies into two types: advance disposal fee (ADF) policy and disposal fee (DF) policy. We compare an ADF policy with a DF policy using a durable-goods monopoly model. This study shows that a DF policy has two opposing effects on built-in durability. Firstly, the DF policy gives the producer an incentive to increase built-in durability in order to delay the households’ disposal and to discount the future payment for the disposal fee. Secondly, the DF policy creates an incentive for consumers to dump waste illegally to avoid the disposal fee, and gives the producer an incentive to reduce built-in durability in order to avoid market saturation and associated future price cuts. As a result, on the one hand, a DF policy can make the producer produce the more durable product compared with an ADF policy; on the other hand, however, a DF policy may increase the amount of waste generated, and lead to an additional environmental damage.This research has been supported by MEXT/JSPS KAKENHI Grant Numbers 18K01634,18K01596 and 19K01606

Human capital kuznets curve with subsistence consumption level

We examine the human capital Kuznets curve in a simple model that does not assume increasing returns to scale in human capital formation. With a utility function that specifies a subsistence consumption level, consumption is a necessary good and education is a luxury good. As the children of poor households receive a low level of education, the gap in human capital endowments expands between poor and rich households. Eventually, economic development increases income and expenditure for education, and income inequality declines.文部科学省科学研究費（研究活動スタート支援）2010年度～2011年度、研究課題番号：2283006