Firm Heterogeneity and Macroeconomic Policy

2016 Fiscal Year Final Research Report

• Project/Area Number: 26380237
• Research Category: Grant-in-Aid for Scientific Research (C)
• Allocation Type: Multi-year Fund
• Section: 一般
• Research Field: Economic theory
• Research Institution: Doshisha University (2016); Kyoto University (2014-2015)
• Principal Investigator: Mino Kazuo 同志社大学, 経済学部, 教授 (00116675)
• Project Period (FY): 2014-04-01 – 2017-03-31
• Keywords: 企業の異質性 / 経済成長 / 課税政策 / 政府支出 / 金融政策 / 金融市場の不完全性 / 研究開発

Outline of Final Research Achievements

This research explores the long-run effects of fiscal and monetary policies in the presence of firm heterogeneity. As to the fiscal policy, we analyze the models in which productivity of firms are heterogeneous and there are financial frictions. In this setting, fiscal policies such as taxation and government spending affect the cutoff level of efficiency that divides active and inactive firms. Since such an effect is absent in the standard models with homogeneous firms, the effects of fiscal actions on long-run growth would be different from these established in the models with homogeneous firms.
As to the long-run impacts of monetary policy, we use models with endogenous growth in which firms' ability of developing new goods are heterogeneous. In this case, the monetary policy affects the cutoff level of the R&D ability. Again. we find that the policy effects are substantially different from these obtained in the forgoing studies that assume homogeneous firms.

Free Research Field

Macroeconomics