2010 Fiscal Year Final Research Report
The Economics of Innovation, Adoption and Long-Run Risk
| Project/Area Number |
20530148
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Single-year Grants |
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| Section | 一般 |
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| Research Field |
Economic theory
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| Research Institution | The University of Tokyo |
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Principal Investigator |
RICHARD AntonBraun The University of Tokyo, 大学院・経済学研究科, 教授 (90329334)
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| Project Period (FY) |
2008 – 2010
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| Keywords | マクロ経済学 |
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| Research Abstract |
I conducted research on two other questions. The first is the channels of technology diffusion. I identified a strong channel of diffusion of business ideas from the United States to Japan. I showed that this channel is strongest in R&D intensive industries and illustrated that variations in the rate of technological diffusion account for a substantial fraction of business cycle variation in Japanese data from 1960 through 2000.
The other question I conducted research on was the analysis of monetary and fiscal policy when the nominal interest rate is zero. I identified a fiscal channel whereby monetary policies that involve purchases of stocks and other private assets can affect economic activity. I also investigated the properties of the New Keynesian model in a zero interest rate environment. Other research by Eggertsson (2010), Woodford (2010) and Christiano, Eichenbaum and Rebelo (2011) has found that the dynamics of the New Keynesian model are very different when the nominal interest rate is zero. They find that an increase in the labor tax can increase economic activity and that the government purchase multiplier can be very large. I demonstrate that one can also produce specifications of the New Keynesian model that have orthodox properties when the nominal interest rate is zero. I then provide empirical evidence that Japan's experience with zero interest rates is most consistent with specifications that have orthodox properties.
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