Showing 1 - 10 of 12
In this paper, we show that underemployment and not necessarily high unemployment becomes the main measure of economic slack under secular stagnation. Specifically, persistent underemployment occurs in the search and matching model, provided that households derive utility from holding wealth,...
Persistent link: https://www.econbiz.de/10013243830
We consider a neoclassical economy where households derive utility from holding wealth. We show that, under some conditions, there can be rational bubbles. Hence, we provide a microfoundation for bubbles that relies on a frictionless infinite-horizon economy without any heterogeneity across...
Persistent link: https://www.econbiz.de/10012915581
We examine the effect of immigration on the host country in the dynamic model that can deal with secular unemployment. Immigration has contrasting effects, depending on the economic state of the host country. If there is unemployment, immigration worsens unemployment and decreases consumption by...
Persistent link: https://www.econbiz.de/10012870735
A tractable model with infinitely lived agents is constructed for the examination of bubbles and unemployment. It is demonstrated that the presence of bubbles stimulates capital accumulation and reduces unemployment. The presence of bubbles also changes the effects of government policies that...
Persistent link: https://www.econbiz.de/10012826419
In recent years firms have started to offshore their innovation activities to emerging economies. This paper investigates the implications of innovation offshoring for productivity growth in a two-country framework that features a tension between access to technical knowledge and low-cost...
Persistent link: https://www.econbiz.de/10012870083
We study the effects of import competition on industry locations patterns in a small open economy with two regions. Domestic productivity growth converges to the international rate through firm-level investment in process innovation. With firms locating production and innovation in their lowest...
Persistent link: https://www.econbiz.de/10012860736
This paper uses a dynamic general equilibrium model to examine whether financial innovations destabilize an economy. Applying a neoclassical production function, we demonstrate that as financial frictions are mitigated, the economy loses stability and a flip bifurcation occurs at a certain level...
Persistent link: https://www.econbiz.de/10013241531
This paper examines how unionization affects economic growth through its impact on industry concentration in a two-country model of international trade and endogenous productivity growth. Knowledge spillovers link firm-level productivity in innovation with geographic patterns of industry...
Persistent link: https://www.econbiz.de/10013308779
In a simple continuous-time model where the learning process affects the willingness to hold liquidity, we provide an intuitive explanation of business cycle asymmetry and post-crisis slow recovery. When observing a liquidity shock, individuals rationally increase their subjective probability of...
Persistent link: https://www.econbiz.de/10012837637
When a government considers a subsidy for an underdeveloped region, it has several options: the subsidies can be for land, wages, employment, or production. While land subsidy is a lump-sum transfer, the others are meant to promote local production or worker immigration. Under full employment,...
Persistent link: https://www.econbiz.de/10012910470