Second, the present study shows that the time cost of raising children is not a prerequisite for the quality-quantity trade-off, pointing to a possibility that fertility may decline even when the opportunity cost of raising children remains constant. 4
This result is consistent with the pattern of fertility decline in Japan in the third quarter of the 20th century where marital fertility declined dramatically while being a housewife remained a common practice. In this period, although women’s participation in the labor force did not rise, the fertility rate declined from 3.65 to 1.91 mainly due to the change in marital fertility (National Institute of Population and Social Security Research of Japan, 2008, Table 4.15). 5
For this reason, we should consider longer-period models. Consequently, we will deal mainly with infinite-period models in this paper; the reasons are as follows. First, infinite-period models have been used to analyze agent behavior in macroeconomics since Ramsey (1928). In particular, it seems plausible that a governments actions would be based on a long-term perspective. The second reason is to avoid the same effect as in any finitely repeated prisoner’s dilemma, which is caused by the existence of a final period.
This is rooted in the findings in Kageyama
（2012） , which empirically showed that the relationships between LEGAP and these happiness indicators are bidirectional. In one direction, LEGAP negatively affects both HPN and HPGAP . An increase in LEGAP raises women ’ s widowhood ratio, and, since widows are, on average, less happy, it lowers women ’ s average happiness, HPN, and HPGAP . We call this effect the “ marital-status composition effect ” as the marital-status composition plays a central role.
September 1, 2016 Abstract
This article examines the effect of government capital injections into financially trou- bled banks on corporate investment during the Japanese banking crisis of the late 1990s. By helping banks meet the capital requirements imposed by Japanese banking regula- tion, recapitalization enables banks to respond to loan demands, which could help firms increase their investment. To test this mechanism empirically, we combine the balance sheet data of Japanese manufacturing firms with bank balance sheet data and estimate a linear investment model where the investment rate is a function of not only firm pro- ductivity and size but also bank regulatory capital ratios. We find that the coefficient of the interaction between a firm’s total factor productivity measure and a bank’s capital ratio is positive and significant, implying that the bank’s capital ratio affects more pro- ductive firms. Counterfactual policy experiments suggest that capital injections made in March 1998 and 1999 had a negligible impact on the average investment rate, although there was a reallocation effect, shifting investments from low- to high-productivity firms.
Finally, our paper is also related to the literature studying banks’ branching decisions. Ru¤er and Holcomb (2001) use data from California and investigate the determinants of a bank’s expansion decision by building a new branch and acquiring an existing branch, respectively. Their results show that a large bank would be likely to enter a new market by acquisition, but not through building a new branch, which is consistent with our result that larger potential entrants have higher synergy ceteris paribus. Wheelock and Wilson (2000) study the determinants of bank failures and acquisitions using a competing-risks model. Consistent with our …nding, they show that less capitalized banks are more likely to be acquired for the period between 1984 and 1993. Cohen and Mazzeo (2007) estimate an entry model with vertical di¤erentiation among retail depository institutions, and …nd evidence of product di¤erentiation depending on market geography.
This paper models the strategic behavior of auction participants, and offers model-based quan- titative benchmarks for assessing the competitiveness and cost-effectiveness of this important mar- ketplace. Our model builds on the seminal “share auction” model of Wilson (1979) in which bidders are allowed to submit demand schedules as their bids. This model captures the strategic complexity of the Treasury’s uniform price auction mechanism very well, and it is in many ways related to classic models of imperfect competition such as Cournot. In particular, consider a setting (depicted in Figure 1) where an oligopsonistic bidder with downward sloping demand for the security knows the residual supply function that she is facing, and is allowed to submit a single price-quantity point as her bid. Following basic monopsony theory, this bidder will not select the competitive outcome (P comp , Q comp ), which is the intersection of her demand curve and the residual supply
• We have assumed that there is only one hedge fund style. What might change if we consider multiple hedge fund styles in the model industry? If the manager’s talent also involves an aptitude for one style over another, then this would be equivalent to having several styles calibrated independently. Since the policy results hinge on broad features of the model and the data, the outcomes of policy experiments are unlikely to change much. The only difference is that some styles tend to rely more heavily on leverage than others, so those are more likely to be hurt by leverage limits. In the working version of the paper, we show that most styles have reported leverage around 1. Out of the fourteen styles considered, four report leverage of around 2 (Convertible Arbitrage, Fixed Income, Equity Market Neutral and Relative Value), and three styles report leverage higher than 2 (Fixed income arbitrage, CTAs and CPOs). Table 8 shows the impact of a leverage cap of 1 on the industry
III.B. Search Costs/Information Frictions
An additional (but not mutually exclusive from product dif- ferentiation) possible explanation for the observed price disper- sion is the influence of search/information frictions faced by in- vestors. A large theoretical literature shows that costly search can sustain price dispersion in homogeneous product markets (e.g., Burdett and Judd , Carlson and McAfee , and Stahl ). Given the very large number of mutual funds offered, it seems reasonable to presume that investors must make some information-gathering investments before deciding between fund alternatives. The presence of a sizable market to reduce investor search costs supports this notion. Several commercial mutual fund ranking services and information aggregators exist (Morningstar, Lipper, Valueline, Yahoo!Finance, etc.). There is even a commercial Internet site (IndexFunds.com) devoted to providing information about index funds. Many fund companies spend considerable sums on marketing and distribution, also consistent with (although neither necessary nor sufficient for) the presence of limited investor information. Survey evidence also suggests considerable information-gathering. The Investment Company Institute  reports that surveyed investors con- sulted a median of two source types (four for those who had consulted a fund-ranking service) and reviewed a median of four- teen different information items (gross returns, relative perfor- mance, etc.) before their most recent purchase. 14 To the extent
1.8.6 The Cobb=Douglas production function satisfies ”Euler’s Theorem.” ===============================================
2.1 (2 points). Use the INTERNET to find monthly number of labor force and unem- ployed person from January 1973 to March 2010. Draw a graph of the number of labor force and unemployed person (use seasonally adjusted data).(Hint: A good place to look for data is the Web site of the Statistics Bureau, Director-General for Policy Planning (Statistical Standards) and Statistical Research and Training Institute.
teristics, such as the size of the branch network and the geographic diversiﬁcation.
While what interests us here is the eﬀect of these changes on consumers, regardless of their cause, it is nevertheless interesting to review the background related to the removal of geographic restrictions in banking. While no causal rela- tionship can be established, the Riegle-Neal Act of 1994 is likely to have played an important role in the expansion of branch networks and other changes in bank prices and ser- vices throughout the 1990s. For many years, ﬁrms and gov- ernment agents debated about the best regulatory framework regarding the geographic expanse of a bank’s activities. Those in favor of deregulation usually argued that it would bring greater eﬃciency and competition among banks, with resulting beneﬁts to consumers. Those against deregulation commonly alleged that the removal of geographic restrictions would lead to highly concen- trated banking markets and high proﬁts in detriment of consumer welfare. In terms of the theory, support can be found for both views based on the diﬀerent assumptions one is willing to make about bank competition, such as the degree of product diﬀerentiation and the nature of the production technology. In previous empirical research,
Pan Pacific Conference in Economic Research The aim of this conference is to promote research activities in various areas of economics, especially in DSGE (macro), contract theory, and applied micro, by providing a platform where researchers in the Pan Pacific region and around the world can present their work to exchange ideas and discuss recent advances in economics.