Abstract: This paper presents a model to study how the expertise acquisition by financial firms influence liquidity. When pledgeability increases, a demand for financial expertise arises, which allows a financial firm to strengthen a bargaining position with its counterparties. The benefit of financial expertise can boost funding liquidity but then, liquidity can evaporate. Financial regulation that imposes bonus caps can be effective to stabilize the economy.

Abstract: The importance of English communication skills has been increasing with globalization and the government has encouraged Japanese youth to go abroad. The causal impact of stay abroad, however, has been little investigated. This study adopts a regression discontinuity design to the government’s flagship program to evaluate its impact on skills development and career choice. We found that the scholarship increased the probability of staying abroad by 59 points and 26 points for high-school and university students, respectively. By comparing the students near the cutoff, we found that the receipt of the scholarship increased English proficiency by 28%, measured by a multiple-choice test we developed (with linguists). Furthermore, the university student recipients became more internationally oriented and more confident in international communication, and they became more likely to join prestigious companies after graduation.

Abstract: Using 1.7 million consumers' purchasing records in Japan, this study examines the cost-of-living index over the life cycle. The main findings of this study are as follows. First, Aguiar and Hurst's (2007) price index indicates that consumers who have retired pay higher prices for identical goods than working-age consumers. Second, the cost-of-living inflation allowing for shopping basket changes is lower for consumers around the retirement age than working-age consumers. Third, reduced-form analyses show that the cost-of-living inflation is negatively correlated with changes in the shopping frequency. These findings suggest that shopping behavior creates the differences in inflation across age groups.

Abstract: This paper provides an axiomatic analysis of sufficientarian social evaluation. Sufficientarianism has emerged as an increasingly important notion of distributive justice. We propose a class of principles that we label generalized critical-level sufficientarian orderings. These orderings provide a welfarist foundation for social policies whose objective is the reduction of poverty. The distinguishing feature of our new class is that its members exhibit constant critical levels of well-being that are allowed to differ from the threshold of sufficiency. Our basic axiom assigns absolute priority to those below the threshold, a property that is shared by numerous other sufficientarian approaches. When combined with the well-known strong Pareto principle and the assumption that there be a constant critical level, the axiom implies that the critical level cannot be below the threshold. The main results of the paper are characterizations of our new class and an important subclass. As a final observation, we identify the generalized critical-level sufficientarian orderings that permit us to avoid the repugnant conclusion and the sadistic conclusion, which are known as two fundamental problems in population ethics.

Abstract: This paper develops a banking model in which the central bank opens discount window and sets the interest rate on reserves in order to study the standing facilities affect the frequency of liquidity crises, a bank's portfolio, and asset prices. I show that an increase in the discount window loan rate and the interest rate on reserves decreases the prices of assets that are used as collateral and change the liquidity structure of the asset's yields. I also show that the existence of the discount window may have a destabilizing effect on the asset prices.

Abstract: We introduce a preference for wealth into the standard search and matching model to analyze the labor market when there is persistent demand shortage. We show that, under some conditions, a secular stagnation steady state exists in which the economy permanently operates below capacity due to both structural unemployment and underemployment. The latter is a direct consequence of the lack of aggregate demand. Our findings are as follows. In the absence of demand shortage, the preference for wealth creates a new transmission channel for shocks and policy measures due to induced changes in the real interest rate, in addition to the job creation channel of the standard matching model. Turning to the stagnation equilibrium, the effects of demand and supply shocks are opposite to those of the standard case and result in a co-movement of unemployment and underemployment. In contrast, the effects of wage and cost shocks depend on the degree of aggregate demand shortage, but they can explain movements of unemployment and underemployment in opposite directions. Finally, we show that fluctuations in the total employment gap under stagnation are primarily driven by fluctuations in underemployment instead of structural unemployment. Our analysis helps to understand why the unemployment rate in Japan has been surprisingly low during its lost decades and highlights the need for further policy interventions in support of aggregate demand despite a seemingly decent employment record.

Abstract: We prove a generalized, multi-factor version of the Uzawa steady-state growth theorem. In the two-factor case, the theorem implies that a neoclassical growth model cannot be simultaneously consistent with empirical evidence on both capital-augmenting technical change and the elasticity of substitution between labor and reproducible capital. In the multi-factor case, balanced growth with capital-augmenting technical change is possible as long as capital has a unitary elasticity of substitution with any single non-reproducible factor, increasing the likelihood that neoclassical models can be consistent with empirical findings. To illustrate the importance of this result, we also build a three-factor growth model with endogenous and directed technical change. The model economy converges to a saddle-path stable balanced growth path, where the long-term rate of capital-augmenting technical change is strictly positive.

Abstract: Firms have exited the market since the start of the COVID-19 pandemic. To evaluate the number of firms exiting the market and their exit rate, we construct a simple model, in which firms optimally choose stopping time for their exit. We estimate the model using firm-level data on firm exits before the pandemic. Subsequently, using recent survey data on firm sales growth, we simulate potential firm exits during the pandemic under the condition that the institutional background, represented by activities such as bankruptcy procedures and government rescue plans, did not change the exit option value. Our main findings are as follows. First, we find sizable heterogeneity with respect to the number and rate of firm exits across industries and regions. Second, in aggregate, the pandemic potentially increased firm exits by around 20% compared to the previous year under the assumption that the recent reduction in firm sales is temporary and, thus, partially incorporated into firms’ expectations for future trend sales growth. In two extreme cases in which the recent sales reduction has a full or no impact on firms' expectations for future sales, firm exits increased by 110% and 10%, respectively. Third, these increases are mainly due to the decrease in the expected sales growth rate, rather than the increase in uncertainty. Finally, we quantify the hypothetical amount of government subsidies needed to prevent excess increases in potential firm exits, which is around 10^3 of Japan’s GDP.

Abstract: Patent licensing negotiations are sometimes intervened to guide the licensing fee to a fair price, but the impacts of such intervention on economic growth and welfare are less unknown. To fill the gap, we develop a novel Schumpeterian growth model featuring cooperative game-theoretic frameworks that can describe the negotiation and endogenously determine the licensing fee. We find that the growth effect of the intervention is negative if firms can unlimitedly raise external funds for their R&D investment. However, when the amount of available external funds is limited, the growth and welfare effects of the intervention can be simultaneously positive. This result suggests that the intervention is desirable when internal funds of firms are the main source of their R&D investment.

Abstract: 本研究では、感染症が広がっている状況下での最適な空港使用料を分析した。空港使用料は航空会社の設定する運賃などを通じて旅客数、つまり地域間の人の移動に影響を与えうる。そのため、空港使用料は、感染症に対するひとつの有効な政策手段となる可能性がある。本研究では、感染症を組み入れた2地域間航空旅客市場モデルを構築し、感染症を考慮したうえでの最適な空港使用料について理論的に考察した。その結果、感染拡大時の最適な空港使用料は、平時（感染なし）に比べて、高くも安くもなりうることが分かった。この結果は、感染症が広がっているときであっても、かならずしも移動を制限するような政策介入が良いとは限らず、状況によっては移動を促すような介入が望ましくなりうることを示唆する。

Abstract：In urban areas, efficient land use and building construction are crucial. However, transaction costs at changing lot sizes might generate lot size persistence and hinder efficient use over the years. We study how initial lot fragmentation affects urban development by exploiting plausibly exogenous supply shock of large lots, the release of local lords' estates (daimyo yashiki) in Tokyo 1868, and constructing a 100m*100m-cell-level data set spanning 150 years. Using OLS and a regression discontinuity design, we find that cells previously used as local lords' estates have larger lots (lot size persistence), taller buildings, higher land prices, and higher firm productivity today. We provide two pieces of evidence that the growth of skyscrapers requiring large footprints generates the positive effect of lot size on urban development through agglomeration benefits. First, tall buildings explain the effect on firm productivity today. Second, before the skyscraper age, the effect on land price was negative. Overall, transaction costs hinder efficient land use persistently, and the emergence of skyscrapers forms the positive relationship between large lots and urban development.