An Analysis of Optimal Resource Allocation -effects of firm heterogeneity and rent-seeking activity-

2017 Fiscal Year Final Research Report

• Project/Area Number: 24730182
• Research Category: Grant-in-Aid for Young Scientists (B)
• Allocation Type: Multi-year Fund
• Research Field: Economic theory
• Research Institution: Kansai University
• Principal Investigator: Doi Junko 関西大学, 経済学部, 教授 (00367947)
• Project Period (FY): 2012-04-01 – 2018-03-31
• Keywords: 異質性 / レントシーキング活動

Outline of Final Research Achievements

The purpose of this research is to analyze the effects of the increase in the government expenditure on welfare in the economy with rent-seeking activities. In this economy, the firms with low productivity may be active in the market when the government increases the expenditure by rent-seeking activities. This decreases the average productivity of this economy (note: I show that the adverse mechanism may arise, depending on the condition.). In the economy where firms determines their wages according to not only their own but the average productivity, the lower average productivity decreases each firm's wage. We call this the wage decreasing effect. However, if lower-productivity firms can be active by rent-seeking activities, it increases labor demand. We call this the labor increasing effect. When the labor increasing effect dominates the wage decreasing effect, the increase in the government expenditure can rise the welfare in this economy, and vice versa.

Free Research Field

マクロ経済学