Akira Takayama

An antinomy in the theory of comparative advantage

Abstract This paper shows that the usual bilateral rule of comparing relative prices under autarky to determine the pattern of trade is not valid for the multicommodity world. In addition, equilibrium world price ratios need not fall between the corresponding price ranges under autarky. Such a paradox disappears under gross substitutability when the third commodity is a nontradeable. For the case of tradeables, an alternative bilateral rule to determine the pattern of trade is proposed. Since the classical constant cost case has been heavily discussed in the literature, we confine ourselves to the neoclassical case.

Monopolistic Competition, Nonhomotheticity, and the Stability of the Chamberlinian Tangency Solution

The focal point in the recent literature on international trade and monopolistic competition is to recast the Chamberlinian partial equilibrium theory in a general equilibrium framework. Using a similar setting, this paper asks whether the Chamberlinian tangency solution is stable under general equilibrium. Paradoxical results follow. When entry occurs, profit per firm can increase and the tangency solution can be unstable. A necessary and sufficient condition for stability is obtained. The concepts of average and marginal factor intensities play an important role in obtaining the stability. Copyright 1990 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Dynamic behavior of the firm with adjustment costs, under regulatory constraint

Abstract This paper investigates the optimal investment behavior of the regulated (profit-maximizing) firm in a dynamic context. The modern adjustment cost approach to investment is incorporated into the theory of a regulated firm, which has typically been discussed in a static framework. This paper thus generalizes the well-known Averch-Johnson thesis which is proved in the static context. The paper investigates both the finite and infinite horizon cases.

The Wealth Effect, the Capital Account, and Alternative Policies Under Fixed Exchange Rates

Introduction, 117. — I. The model, 119. — II. Some remarks on the usual model, 123. — III. The effects of fiscal and monetary policies, 127. — IV. Dynamics and long-run equilibrium, 132. — Appendix: The budget condition, the monetary relation, and various policies, 139.

A Dual Approach to Measuring the Nearness of Near-Monies

Increasing returns to scale (RTS) is frequently po stulated as affecting productivity in surface coal mining. However, it is not cl ear whether increased capital intensity or increased output is the relevant phen omenon. A ray-homothetic production function that incorporates the capital labor mix and fixed site geology into the scale elasticity is presented and estimated with a micro (mine level)dataset. The results indicate that higher capital int ensity contributes to higher RTS for some types of capital equipment, but not al l. On the average, increasing RTS was found, with few mines approaching optimal scale. Copyright 1987 by MIT Press.

The theory of tariffs in a monetary economy

Abstract A two country two commodity model of international trade in a monetary context is utilized for the re-evaluation of the classical propositions in international trade theory which are usually derived under barter. A comparison of results under alternative exchange rate regimes is given. The effects of tariffs on the balance of payments and on domestic price levels is also studied.

Minimum wage regulation and economic growth

Abstract This paper investigates the long-run growth implications of minimum wage regulation (MWR) enforced nationally using a familiar aggregate growth model. The paper shows that MWR, if it is effective, always lowers the rate of growth, and that the minimum wage floor, if it is sufficiently high, causes the economy to decay all the way toward the origin. The effects of a “wage-mark-up” policy, a variation of MWR, are also examined.

On consumer's surplus

Abstract This note intends to clarify much of the confusion in the literature on consumers surplus and obtain a simple discussion on this topic in a unified framework. The letter then contains a number of new results.

The symmetry of real purchasing power and the neoclassical monetary growth model

Abstract It has been argued that the usual instability property of the neoclassical monetary growth model can be removed if an asymmetric treatment of real purchasing power between the real and monetary sectors is eliminated, i.e., if the demand for money is made to depend on disposable income and not income. Basically, the argument is that this symmetry can offset the destabilizing forces of the Wicksell effect of the rate of inflation on the demand for money. We show that, under the usual stipulations of the model, the instability (saddle-point) nature of the model cannot be altered by such an argument.

ON THE ANALYTICAL FRAMEWORK OF TARIFFS AND TRADE POLICY

Publisher Summary This chapter presents an analytical framework of tariffs and trade policy. It also presents the common analytical framework that exists in the recent literature on international trade policy. as many policy questions can be handled either by the comparative statics procedure in which policy tools are taken as shift parameters of the equilibrium system or by obtaining the conditions for certain optimization problems, the success of the offer-curve analysis is quite remarkable. However, this tool also has weaknesses that are common in many geometric analyses: (a) the basic assumption and logical steps in the analysis are often concealed in the usual manner that the curves are drawn, and (b) it is hard to extend the analysis to situations that are more complicated than the analytical framework incorporated in the usual offer curve technique. For the latter point, it may suffice to point out the difficulties involved in analyzing such questions as domestic distortions and non-traded commodities by means of the offer curve. The chapter discusses two problems in trade theory: (1) that of domestic distortions and (2) that of non-traded commodities.