2023 Fiscal Year Research-status Report
Inequality dynamics, underemployment, and secular stagnation
| Project/Area Number |
21K13261
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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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| Keywords | Inequality / Underemployment / Secular stagnation / Labor market / Unemployment / Wealth taxes / Macroeconomics / Rational bubble |
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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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| Causes of Carryover |
I could save on the expenses planned for the international conference in Singapore as I could acquire additional funding for this conference.
Instead, I'm planning to use the savings for presentations at other international conferences in the following year. Specifically, we have applied to several conferences in the U.S., Europe and Asia with our new working paper on wealth inequality (acceptances pending).
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