Hajime Hori

Utility functionals with nonpaternalistic intergenerational altruism

Abstract The purpose of the paper is twofold. The first purpose is to investigate the conditions for the existence and uniqueness of stationary utility functionals which embody a two-way non-paternalistic intergenerational altruism. The specific forms of the utility functionals are also derived in the linear case. The second purpose is to investigate whether these functionals can generate consistently optimum distribution programs. Using a simple overlapping generations framework, it is shown that the answer to this question is negative as long as the younger generations utility is given any weight in each periods objective functional.

Non-paternalistic Altruism and Utility Interdependence

This paper clarifies the notion of non‐paternalistic altruism through the use of utility aggregators. It presents conditions for the existence of non‐paternalistically altruistic utility functions and provides a complete characterization of such utility functions. The results are used to generalize the Second Theorem of Welfare Economics and to prove the existence of an equilibrium in a game of voluntary gift‐giving. JEL Classification Nos.: D11, D64.

A Hicksian two-sector model of unemployment, cycles, and growth

Abstract This paper analyzes cycles and growth using a dynamic version of the Hicksian two-sector model. Two types of friction, nominal wage stickiness and non-shiftability of capital, are present. It is found that sectoral imbalances caused by the non-shiftability of capital are corrected in finite time through investment allocation and the possibility of cycles depends on the speed of nominal wage adjustment. The arriving order of the turning points of such variables as the nominal and real wage rates, investment, employment, output, and capital is established.

A turnpike theorem for rolling plans

Abstract This paper analyzes the asymptotic properties of rolling plans in a multi-sector growth model with time-independent preferences and technology. Assuming that the model under consideration has a unique turnpike towards which all the finite optimal programs bend, the paper shows that, if plans are constantly revised with a fixed but sufficiently long planninghorizon, the resulting growth path converges to a neighborhood of the turnpike.

Stability of the Neumann Ray in a Dynamic Leontief System with Finite Forecast Horizons

This paper considers whether the dynamic stability of the steady-state growth path, deduced in various models under the assumption of perfect foresight, can be sustained if foresight is imperfect. Using a dynamic Leontief system as the framework and measuring the degrees of goodness of foresight by the length of the forecast horizon, the paper derives an affirmative answer. The result can also be interpreted as asserting that the Neumann ray serves as a turnpike for a rolling plan of a long planning horizon.

A Hicksian Two-Sector Model of Cycles and Growth

This chapter analyzes cycles and growth using a dynamic version of the Hicksian two-sector model. Two types of friction, nominal wage stickiness and non-shiftability of capital, are present. It is found that sectoral imbalances caused by the non-shiftablilty of capital are corrected in finite time through investment allocation and that the possibility of cycles depends on the speed of nominal wage adjustment. The arriving order of the turning points of some important economic variables is established.

An Aggregative Model of Unemployment, Cycles, and Growth

The purpose of this chapter is to analyze business cycles in a growing economy based upon two principal postulates, namely that (1) fluctuations of involuntary unemployment are an essential constituent of business cycles and (2) accumulation of capital is an integral part of business cycles. Using a macro model which is a close descendant of the monetary growth theory, this chapter establishes the arriving order of the turning points of major economic variables during a cycle, which also serves to resolve the so-called real wage puzzle.

Stabilization Policies and Business Cycle Dynamics

Stabilization policies interfere with the dynamic workings of the economic system to which they are applied. As a result, they necessarily generate some dynamic repercussions in the process. This chapter analyzes the dynamic interplay between stabilization policies, capital accumulation, and business cycles. Capital accumulation is an integral part of business cycles. It is not just a component of demand but an addition to the economy’s productive capacity, and, as such, has a lasting influence on employment. As a result, by affecting capital accumulation, stabilization policies can modify the entire shape of business cycles. Assuming a feedback-type policy function, it is shown that, due to the crowding-out effect of fiscal expenditures, too intensive implementation of fiscal stabilization policies leads to instability of the dynamics, but that suitably coordinated monetary policy may be capable of recovering stability.

Rolling plans and the turnpike in a dynamic input-output system: A simulation study

Abstract The catenary movement of optimal growth paths toward the turnpike is referred to as the turnpike property. Tsukui and others have demonstrated the robustness of this property using various programming versions of the dynamic input-output system. The turnpike property was clearly observed even in relatively short-term simulations. Hori and others have demonstrated theoretically and qualitatively that a rolling plan with a sufficiently long horizon for its subplan also exhibits the turnpike property. This paper investigates quantitatively the robustness of this property. The tentative conclusion is that five years are a reasonable time span for making a rolling plan in the sense of its proximity to a long-term optimal path.

Rules of Thumb in Expectations Formation and Stability of Growth Dynamics

Publisher Summary It is well known that the steady states of growth models with myopic perfect foresight usually show saddle-point instability for dynamic Leontief models. This chapter discusses heterogeneous capital–goods model, that is, an Uzawa-type two-sector growth model modified by the nonshiftability of capital, which introduces the heterogeneity of capital goods. Available assets are the two kinds of equity capital with limited liability, and the nonnegativity of their prices plays an important role. In such a model, simple but powerful rules of thumb are available, and even with an apparent myopia, the dynamics of the model are stable. The chapter discusses the real aspect of the model and the mechanism of expectations formation and the rules of thumb that supplement the expectations formation.