Toshihiko Mukoyama

Entry, Exit and Plant-Level Dynamics over the Business Cycle

This paper analyzes the implications of plant-level dynamics over the business cycle. We first document basic patterns of entry and exit of U.S. manufacturing plants, in terms of employment and productivity, between 1972 and 1997. We show how entry and exit patterns vary during the business cycle, and that the cyclical pattern of entry is very different from the cyclical pattern of exit. Second, we build a general equilibrium model of plant entry, exit, and employment and compare its predictions to the data. In our model, plants enter and exit endogenously, and the size and productivity of entering and exiting plants are also determined endogenously. Finally, we explore the policy implications of the model. Imposing a firing tax that is constant over time can destabilize the economy by causing fluctuations in the entry rate. Entry subsidies are found to be effective in stabilizing the entry rate and output.

Innovation, imitation, and growth with cumulative technology

Abstract This paper analyzes the interaction of innovation and imitation in the growth process. Technology is assumed to be cumulative: only leaders can conduct next-round innovation. Outsiders can become leaders by imitation. Our results show that subsidizing imitation may increase the economy-wide rate of technological progress. There are cases where competition and growth exhibit positive correlation. In these cases, promoting imitation enhances not only the static efficiency but also the dynamic performance of the economy.

A three state model of worker flows in general equilibrium

We develop a simple model featuring search frictions and a nondegenerate labor supply decision along the extensive margin. The model is a standard version of the neoclassical growth model with indivisible labor with idiosyncratic shocks and frictions characterized by employment loss and employment opportunity arrival shocks. We argue that it is able to account for the key features of observed labor market flows for reasonable parameter values. Persistent idiosyncratic productivity shocks play a key role in allowing the model to match the persistence of the employment and out of the labor force states found in individual labor market histories.

The cyclicality of job-to-job transitions and its implications for aggregate productivity

This paper analyzes the job-to-job transitions of workers in the United States. First, I propose a new method of correcting the time-aggregation bias. The bias correction does not significantly alter the cyclical properties of the job-to-job transition rates. The bias-corrected series from 1996 to 2011 reveals a procyclical pattern of job-to-job transitions and a large decline since the beginning of the 2000s. Second, I construct a model of on-the-job search and explore the implications of this phenomenon. The calibrated model quantifies the effect of the decline in the reallocation of workers through job-to-job transitions on total factor productivity (TFP). From 2009 to 2011, the model accounts for about 0.4–0.5% annual decline in TFP.

The Cost of Business Cycles for Unskilled Workers

This paper reconsiders the cost of business cycles under incomplete markets. Primarily, we focus on the heterogeneity in the cost of business cycles among agents with different skill levels. Unskilled workers are subject to a much larger risk of unemployment during recessions than are skilled workers. Moreover, unskilled workers earn less income, which limits their ability to self-insure. We examine how this heterogeneity in unemployment risk and income translates into heterogeneity in the cost of business cycles. We set up a dynamic general equilibrium model with incomplete markets, in which there is heterogeneity in skills, employment status, asset holding, and the discount factor. We find that the welfare cost of business cycles for unskilled workers is substantially higher than that for skilled workers.

Heterogeneous Jobs and the Aggregate Labour Market

This paper analyzes a simple search and matching model with heterogeneous jobs. First, I derive an explicit formula that ensures the social efficiency of the equilibrium outcome. This formula generalizes the well-known Hosios condition and clarifies the role of externalities across labor markets for different types of jobs. Second, business cycle fluctuations with heterogeneous jobs are analyzed. Heterogeneity in productivity and job stability plays an important role in generating strong labor-market responses to the aggregate labor market to productivity shocks.

A simple model of productivity slowdown

This article demonstrates a simple mechanism of productivity slowdown. There are two types of technological change: exogenous and endogenous. After news arrives that there will be an acceleration of exogenous technological progress in the future, endogenous technological progress may slow down.