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...

Constructing a simple model that includes the price of education, this paper shows that the educational expenditure of rich households could prevent poor households from escaping poverty. The paper offers an explanation for persistent inequality.

Constructing a general equilibrium model which compactly incorporates the markets for outputs, labor, money, and equities, we examine equilibrium unemployment. While a mechanism of an efficiency wage brings about nominal wage rigidity, unemployment occurring in our model definitely has Keynesian...

Licensing is one of the major sources of international technology transfer to developing countries. This paper clarifies how strengthening intellectual property rights (IPRs) affect innovation and licensing by making use of a quality-ladder type of dynamic general equilibrium model. We explore...

Using an overlapping generations model, this note shows that an improvement in the efficiency of human capital production decreases the net income of the young household while increasing that of the old. Without compensating redistribution, it deteriorates lifetime utilities of all generations...