This paper constructs a small economy version of dynamic Heckscher-Ohlin models with overlapping generations and analyzes effects of capital income taxation on the specialization pattern of the country. It is shown that once international asset trade is allowed, in the presence of international...

Retaining the basic properties of the Heckscher-Ohlin trade model, namely, free entry and exit, fully integrated international commodity markets, and the same number of sectors with that of factors, the authors develop a two-country model with Cournot oligopoly. In this economy, factor price...

We theoretically analyze the effects of a child allowance, an improvement in the efficiency of child rearing and a labor income tax on the fertility rate and per capita consumption. The effects on per capita consumption are opposite in the absence, and the presence, of unemployment. For example,...

Using a competitive two-country two-commodity monetary model with optimizing agents in which persistent unemployment arises, this paper examines the effects of trade restrictions on consumption and employment in the two countries. When facing unemployment, a country tends to impose an import...

Although the Keynesian multiplier effect of public works is criticized for lack of a microeconomic foundation, it is still taught in most undergraduate courses and believed to be useful for policy makers. However, it has a serious fallacy even if we accept the consumption function. This note...