With a shift since 1985 toward higher yen value, the issue of the overseas-domestic price gap has come under sharp focus. The prices of goods, which should fall due to the rising value of the yen, do not in fact fall. With regard to certain brand items from overseas, exorbitant prices are...

In this paper we review the role of monetary policy for a country facing deflationary pressure based on the recent experience of the Japanese economy. We discuss economic background of inflation policy in Japan and analyze the impacts of the policy. Japanese economy is in a liquidity trap now....

In oligopolistic situations, content protection can have unexpected effects as it changes the nature of inter actions between input suppliers. With a duopoly, it does so in a mann er that makes the foreign firm wish to match price increases and decr eases of the domestic firm. Domestic input...

Determinacy of equilibrium under the original, the backward-looking, the forward-looking and the hybrid Phillips curves is examined. If the monetary authority keeps the nominal money stock to be constant, the equilibrium path is always determinate under the original Phillips curve and the...

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...

The Keynesian multiplier effect is reinterpreted and several issues that may have misled assessments of the effect of fiscal spending are discussed. It is shown that even in the textbook Keynesian framework some transfer policy ‘reduces’ aggregate demand and that public works spending may...

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...