| Research Abstract |
1.Implications of Ono's stagnation theory (Ono) : (1) In the presence of nonsatibale wealth preference, persistent asset inflation (or bubble) can occur even if consumers are perfectly rational. (Ono, Iwanami). As an alternative of the conventional aggregate demand-aggregate supply analysis, we develop a new analytical tool. It is used to establish a dynamic foundation to the Phillips curve. (two articles in Economic Review). (3) Ono's stagnation model of a closed economy is extended to a two-country model. It is found that a county with a large foreign asset tends to face persistent unemployment.
2.Empirical evidence of nonsatiable liquidity preference (Ono and Yoshida) : Using the PSID data on US consumers and non-parametric methods, we find that the nonsatiable liquidity preference hypothesis is positively supported.
3.The dynamics of cumulative external debt (Ikeda and Ono) : Using models in which external debts accumulation is generated by international difference in time preference
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, we have examined welfare effects of economic policies to improve the external imbalance, such as saving-restriction policies (e.g., capital taxs), trade policies (import quota, VER), fiscal policies. Among others we obtain the following results : (1) These policies to improve the external imbalance are often harmful in welfare. (2) Export promotion for debtor country and import promotion for creditor country can be the optimal trade policies for respective countries. (Ono and Ikeda [1996], Kluwer) (3) The effects of fiscal policies is crucially affected by the tax system (a lump-sum tax or a consumption tax) that finances fiscal spending. (Ono and Ikeda [1996], J.E.)
4.A microeconomic aspect of international spill-over effects of economic policies (Ono) : The welfare effects of opening trade, entry restrictions, and R&D subsidies are examined in the context of oligopoly. (Lahiri and Ono [1995 ; IER,Kluwer, and J.E.R]) It is shown that the welfare implication crucially depends on whether oligopolists are symmetric or asymmetric. For example, in an asymmetric oligopoly helping more efficient firms strategically tends to benefit a country. Less
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