| Budget Amount *help |
¥1,800,000 (Direct Cost: ¥1,800,000)
Fiscal Year 2004: ¥700,000 (Direct Cost: ¥700,000)
Fiscal Year 2003: ¥1,100,000 (Direct Cost: ¥1,100,000)
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| Research Abstract |
Contributions to macroeconomics of habit formation are summarized in the following three papers
(1) Ikeda (2003) : I give a comprehensive survey on macroeconomic theory of rational habit formation. It contribute in three points. Firstly, I clarify relationship between habit formation and preference parameters such as tune preference, inteitemporal elasticity of substitution, and the degree of risk aversion. Secondly, I survey empirical implications of habit formation for various stylized facts such as risk premium puzzle and consumption excess smoothness. Thirdly, I examine implications for macroeconomic dynamics such as the issues of consumption-saving decision, the current account, endogenous growth, and labor supply.
(2) Gombi and Ikeda (2003) : We examine we are effects of income transfers between heterogeneous two countries with habit formation. It is shown that with internationally heterogeneous habit formation, an international income transfer affects the world interest rate, whic
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h can harm the recipient country through the intertemporal teams of trade effect. The paper was presented as an invited lecture at the 2003 Annual Meeting of JEA.
(3) Ikeda and Gombi (2004) : We examine the determination of consumption-, current accounts, the interest rate and welfare in an two-country world economy with habit formation. We define 'surplus income' to represent how easily a country can save under habit formation, and thereby showing that a country with a larger (smaller) surplus income becomes a creditor (debtor). As a welfare implication, we show the possibility that an increase in a lump-sum tax in a country can improve the country due to a beneficial intertemporal terms of trade effect. The paper was presented at the 79^<th> Western Economic Association International.
I also examine macroeconomic implications of endogenous time preference. In particular, Ikeda (forthcoming in IER) develops a dynamic theory of luxury consumption, thereby showing macroeconomic implications of luxury. Less
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