Introducing informational asymmetry, this paper shows that endogeneous stock price fluctuations may make the stock price highly volatile in a present value model. In the analysis, we assume that the firm's productivity is stochastic and can be good type or bad type. We also assume that the firm...

This paper investigates how some intrinsic uncertainty will affect the existence of sunspot equilibria and deterministic cycles in a simple overlapping generations model. In the model, there exists an intrinsic uncertainty under which each individual independently has a small probability of...

The purpose of this paper is to investigate how the existence of near-rational agents will affect the existence of sunspots in a simple overlapping generations model of fiat money. In the model, near-rational agents are irrational in the sense that they do not literally maximize all the time....

This paper investigates why invoice ratios of the Japanese yen are relatively low for Japan's exports. Given "pricing-to-market"(PTM) behavior of Japanese exporters, we show that the demand conditions in the markets can explain the choice of invoice currency by Japanese exporters. In particular,...

This paper investigates effects of money growth on the non-convergent dynamic paths in a model of money in the utility function with liquidity-in-advance. We show that the effects generally depend on the form of utility function of money. That is, when the relative risk aversion is decreasing in...

The purpose of this paper is to investigate the optimal rate of money supply growth when a moral hazard problem in an insurance market makes the risk diversification incomplete. The analysis is based on a simple overlapping generations model of fiat money with idiosyncratic uncertainty. Without...

This paper investigates how the adverse selection effects of net worth will change the welfare effects of demand and supply shocks. In the economy, there exists asymmetric information in the financial market, under which an increase in the value of net worth may rule out good type of firms from...

This paper investigates why invoice rations of the Japanese yen are relatively low for Japan's foreign trades. The first part of the paper investigates the determinants of invoice currencies in Japan's exports with East Asian countries. Focusing on the heavy reliance of Japan's exports on the...

This paper empirically investigates the determinants of capital controls and their effects on trade balance during the period of capital market liberalization in Japan. As is well known, the capiral market in Japan was gradually liberalized in the 1970s. By paying the special attention to the...