In a continuous-time economy with complete markets, we study how the heterogeneity in the individual consumers' risk tolerance and impatience affects the representative consumer's risk tolerance and impatience. We derive some formulas, which indicate that the representative consumer's impatience...

We consider an exchange economy under uncertainty, in which agents' utility functions exhibit constant absolute risk aversion, but they may be recursive and the expected utility calculation may be based on multiple subjective beliefs. The risk aversion coefficients, subjective beliefs,...

This paper presents estimates of the rate of scale economies and technical change in the gas distribution industry with rate of return regulation as firm level in Japan using a translog non-minimum cost function. The result bases on a sample of 9 privately owned firms for the period 1981-1995....

In this paper, I will show that the quadratic shape of the Engel curve for alcohol can be explained by preference heterogeneity between drinkers and abstainers. The main findings here are; i) the shape of the Engel curve of drinkers for alcohol was linear and negatively sloping; ii) the share of...

We use the result from a survey of Japanese firms in manufacturing and service to investigate the choice of wage and employment adjustments when they needed to reduce substantially the total labor cost. Our regression analysis indicates that the large size reduction favors the layoffs of the...

This paper analyzes monetary policy implication in an endogenous growth model in which the average growth rate is inefficiently low and in which the capital accumulation technology is concave. This paper does two exercises. First, we derive the utility-based welfare criterion of the model. The...

We provide necessary and sufficient conditions on an individual's expected utility function under which any zero-mean idiosyncratic risk increases cautiousness (the derivative of the reciprocal of the absolute risk aversion), which is the key determinant for this individual's demand for options...

This paper presents an overview of recent development in the new economic geography (NEG), and discusses possible directions of its future development. Since there already exist several surveys on this topic, we focus on the selected features of the NEG which are important yet have attracted...

This paper presents a new mixing condition for dynamic economies with a Markov structure. The mixing condition is stated in terms of order, and generalizes a number of wellknown conditions used to establish stability of monotone dynamic models. By generalizing the key insights of the original...