Even if the relatively rich and the poor are initially caught in a poverty trap, the relatively rich can escape poverty by receiving payments from the poor. Further accumulation of wealth by the rich allows the poor to escape poverty.

We clarify the different effects of elementary and higher education on human capital accumulation and inequality. The productivity of elementary education plays a significant role in the widening of inequality regardless of the existence of multiple steady states. When the productivity of...

This note examines how the second chance, when provided to a disadvantaged player, can resolve the prisoner’s dilemma.

Industrial development is often accompanied by massive migration from agricultural to industrial areas. This paper compares two steady states, the first and the second, which emerge before and after the termination of such migration, respectively. The paper shows that 1) the employment rate must...

This paper presents a general equilibrium model that extends a static New Keynesian framework to an overlapping generations model. The model shows multiple stationary states, one of which has the following strong Keynesian features: (1) a reduction in wages generates increased unemployment...