This paper investigates how the soft-budget constraint with grants from the central government to local governments tends to internalize the vertical externality of local public investment by stimulating local expenditure when both the central and local governments impose taxes on the same...

This?paper?examines?the?effects of the demographic change and the government debt policy in Japan on economic growth and economic welfare, particularly by taking into account the existing public pension scheme as well as national medical expenditure through the existing public health insurance,...

We investigate the structure of interactions among countries exercising voluntary uncoordinated choice but sharing a common "risk profile" --- a vector comprised of chance of adversity/emergency and magnitude of loss under adversity/emergency. We use the term "emergency costs" to refer to the...

The purpose of this paper is to analyze sustainability issues of Japan's fiscal policy and then to discuss the debt management policy using theoretical models and numerical studies. We also investigate the desirable coordination of fiscal and monetary authorities toward fiscal reconstruction. We...

We provide an analysis of odds-improving self-protection for when it yields collective benefits to groups, such as alliances of nations, for whom risks of loss are public bads and prevention of loss is a public good. Our analysis of common risk reduction shows how diminishing returns in risk...

This paper investigates dynamic properties of environmental externalities with a framework of voluntary provision of a public good by analyzing the intimate duration dynamic game. We compare the first best solution, the open-loop solution under enforceable commitments, and the closed-loop...

This paper considers a tax competition model in which regional government activities include income redistribution as well as public good provision. To incorporate the regional government function of income redistribution, we extend the tax system from the stylized proportional capital income...

This paper concerns self-insurance and self-protection that countries may implement at a national level in pursuit of their security. The distinctions self-insurance, self-protection, and market insurance were first made by Ehrlich and Becker (1972). Nevertheless, extension of their models to...

This paper investigates the implications of cooperative and non-cooperative defense spending of allied countries in conflicting blocs using static and leader-follower game models. It is well known that in the three-country world with two allies and an adversary all countries may be worse off...

This paper investigates the effect of wealth taxation on economic growth using an endogenous growth model with the altruistic bequest motive. We introduce intragenerational productivity differentials of human capital formation, resulting in differences of growth rates among individuals. The...