2015 Fiscal Year Annual Research Report
Novel approaches to analysis of welfare impact of industrial policies
| Project/Area Number |
26705003
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| Research Institution | The University of Tokyo |
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Principal Investigator |
ファビンガー ミハル 東京大学, 経済学研究科(研究院), 講師 (00715998)
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| Project Period (FY) |
2014-04-01 – 2018-03-31
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| Keywords | 租税負担 / 為替レート パススルー / ミクロ経済学 |
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| Outline of Annual Research Achievements |
The purpose of this project is to explore, in collaboration with Glen Weyl of Microsoft Research and Yale University, the implications of realistic properties of demand and supply curves that have not been previously studied due to a lack of empirical data. As larger and more detailed datasets are becoming available due to falling costs of information technology, it becomes crucial to understand the predictions of economic models that incorporate the shapes of demand and supply curves consistent with new empirical findings. Our research agenda involves (1) a novel, flexible approach to analyzing economic equilibria involving generic demand curves and cost curves, (2) a very general investigation of the social impact of price discrimination by firms, and (3) generalization of our approach to dynamic settings. Point (1) above was successfully implemented by completing the paper A Tractable Approach to Pass-Through Patterns. We show how to use Laplace transform to solve economic models and illustrate this approach in the case of models of supply chains, wage bargaining, and standard models of international trade. In addition, we found that our analysis can be substantially generalized to other settings and we continue to expand the scope. In addition, we are implementing point (2) above.
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| Current Status of Research Progress |
Current Status of Research Progress
2: Research has progressed on the whole more than it was originally planned.
Reason
We continue to make progress on the project, currently expanding mainly its empirical side. We found that existing models of international trade are inconsistent with newly identified patterns in firm-level international trade data. Based on our Laplace transform approach, we were able to create a more general model that correctly fits the data, and we empirically estimated the parameters of the model.
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| Strategy for Future Research Activity |
I plan to present the results of the broader research agenda at various conferences, meetings, and universities.
I will meet with Glen Weyl at Yale University to continue working together on this project. In particular, we plan to focus on third-degree price discrimination.
With the help of research assistants, we will develop various applications of our broader agenda to various settings in industrial organization, international trade, international finance, and health economics.
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| Causes of Carryover |
During the last year, I did not use the full amount I was allowed to use because I expected larger expenditures in the following years. While our previous research involved mainly developing technical tools for analyzing markets, in the following years we will focus on applying them to concrete economic situations.
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| Expenditure Plan for Carryover Budget |
The application of our methods to concrete economic situations will require purchases of data sets and help from research assistants. In addition, to communicate our results to the research community, some funding will be needed for international travel.
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