| Project/Area Number |
21K13261
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| Research Category |
Grant-in-Aid for Early-Career Scientists
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| Allocation Type | Multi-year Fund |
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| Review Section |
Basic Section 07010:Economic theory-related
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| Research Institution | Sophia University |
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Principal Investigator |
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| Project Period (FY) |
2021-04-01 – 2026-03-31
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| Project Status |
Granted (Fiscal Year 2023)
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| Budget Amount *help |
¥4,550,000 (Direct Cost: ¥3,500,000、Indirect Cost: ¥1,050,000)
Fiscal Year 2025: ¥780,000 (Direct Cost: ¥600,000、Indirect Cost: ¥180,000)
Fiscal Year 2024: ¥780,000 (Direct Cost: ¥600,000、Indirect Cost: ¥180,000)
Fiscal Year 2023: ¥1,040,000 (Direct Cost: ¥800,000、Indirect Cost: ¥240,000)
Fiscal Year 2022: ¥910,000 (Direct Cost: ¥700,000、Indirect Cost: ¥210,000)
Fiscal Year 2021: ¥1,040,000 (Direct Cost: ¥800,000、Indirect Cost: ¥240,000)
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| Keywords | Inequality / Underemployment / Secular stagnation / Labor market / Unemployment / Wealth taxes / Macroeconomics / Rational bubble / Labour market / Wealth preference |
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| Outline of Research at the Start |
This research project uses modern macroeconomic models with features from behavioral economics to analyze inequality, underemployment and slowing economic growth as well as their interdependence. The goal is to provide for a better understanding and to contribute to the solution of these challenges.
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| Outline of Annual Research Achievements |
My research agenda (joint with Japanese and international researchers) has seen considerable progress throughout the year with two major publications and one working paper.
In April 2023, our article on underemployment in the Japanese labor market was published in the Journal of Economic Theory. In July 2023, we published our analysis of rational bubbles as a result of a preference for wealth in the European Economic Review. In addition, our preliminary analysis of inequality dynamics in the presence of a preference for wealth is now available as a working paper. The analysis includes extensive numerical simulations of various policy interventions, such as wealth taxes, consumption taxes and levies. We are planning to submit this paper within the next year for publication.
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| Current Status of Research Progress |
Current Status of Research Progress
1: Research has progressed more than it was originally planned.
Reason
Initially, we were quite concerned about the numerical solution of our model for the analysis of inequality dynamics as our algorithm failed to converge. However, we could eventually overcome the problems and successfully analyze the effects of various policy interventions.
In addition, progress on the extensions of the underemployment project has been very smoothly, in particular due to valuable feedback from referees of the published paper and participants of conferences.
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| Strategy for Future Research Activity |
We are considering the following extensions of the research agenda:
Our analysis of wealth inequality dynamics is so far based on a real economic model without nominal frictions. In the next project, we are considering to add nominal rigidities (such as wage frictions and the zero lower bound on the interest rate) to analyse these dynamics under secular stagnation.
Our analysis of underemployment is based on a closed economy model with exogenous job destruction. We are currently working on an open economy version of the model and are also considering the possibility of endogeneous job destruction.
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