open access

https://hdl.handle.net/2115/29721

Macroeconomics with frictions

英語

2000-06

x, 160p.

The dissertation consists of three essays on macroeconomic theory. The first essay investigates monetary theory with special attention given to bilateral strategic bargaining. It uses a version of the search-theoretic model of money developed by Kiyotaki and Wright (1991) to study the implication of agents’ strategic behavior on the purchasing power of money. The dependence of agents’ preferences on the quality of match as well as the quantity consumed is considered in order to study the impact of heterogeneous outside options on the bargaining process and hence on the purchasing power of money. The model naturally gives rise to price dispersion due to endogenously dispersed outside option values. The purchasing power of money thus depends not only on what it will buy in the future, but also on who matches with whom. Strategic bargaining and Nash solutions do not coincide even in a steady state. Strategic bargaining results in a higher market volatility than does Nash bargaining because the values of outside options are match-specific andNash bargaining does not use all of the information provided by the market. The second essay reconsiders the link between tight money policies and inflation in the spirit of Sargent and Wallace’s (1981) influential paper “Some UnpleasantMonetarist Arithmetic.” In contrast to the previous results, this essay shows that a tight money policy engineered by open market operations can be inflationary even when the real interest rate is less than the growth rate of the economy. The key to the result is the introduction of a neoclassical concave production function, which generates the “interest rate effect”: tight money raises the real interest rate. The high interest rate reduces bond seigniorage if the economy is on the “good side” of the bond-seigniorage Laffer curve. This revenue short fall has to be made up by increasing the inflation rate. In contrast to the conventional wisdom, it is the bondseigniorage Laffer curve, rather than the total seigniorage Laffer curve, that is the key determinant of whether an economy exhibits unpleasant monetarist arithmetic. The third essay deals with unemployment. It reconsiders the potential role that government intervention in the labor market can have in improving the level of economic activity. In the early literature, economists such as Keynes (1936) are optimistic about the effects of public policies on employment, even though their arguments receive little support from the modern theoretical literature. However, real-world observations give a different view. Governments, especially in developing countries, routinely provide large-scale public employment programs. Using an overlapping generations model with production and asymmetric information problems in the labor market, the chapter looks for an explanation for why such governments might want to provide jobs. In such an economy, the government can attract part of the labor force at a wage rate that is lower than the private wage rate. There arise two long-run equilibria. If the low-activity steady-state is regarded as describing of a developing country, then the model suggests that the provision of public employment programs in developing countries may improve long-run eco-nomic activity. Also, it may help these economies get out of development traps. The model also provides insights as to why, in developed economies, public employment programs may be harmful and why unemployment insurance programs have better results.

2000-06

博士(経済学)

博士論文

Version of Record