This paper shows the relationship between the wage differentials and the internal labor market structures. I propose a hypothesis which explains the wage differentials between different sexes, races or other signals. Such wage differentials occur even if every laborer has the same ability and the same propensity to quit, under the following conditions:
(1) The firm must employ at least a certain number of skilled laborers.
(2) The skilled labor which the firm demands is idiosyncratic.
(3) More unskilled labor is demanded than skilled labor.
(4) The wage rate is not uniquely determined in the labor market, but distributed over some ranges.
(5) The laborer maximizes his present value of the wages over two periods.
Under the conditions (4) and (5), it is shown that the higher the wage rate, the longer the laborer intends to stay with the same employer. The validity of this relationship is empirically tested. Therefore if the firm pays the higher wages to the employee, the firm can employ him (her) longer.
(6) The firm maximizes its profit.
When the firm chooses the length of tenure of employee so as to maximize its profit under the above relationship, the consequence of the firm's decision results in the wage differentials between the different sexes, races or other signals.

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In this paper, we formulate the optimal growth model of a dual economy. In our model, the production and consumption in traditional sector are more explicitly taken into consideration. For instance, the average product of labour in traditional sector diminishes with increment of labour input. The value of it is equal to the income per capita in traditional sector and the supply price of labour to modern sector.
We obtain the following. On the optimal path, capital accumulation and the enlargement of consumption make progress simultaneously. And, in one case, income difference between two sectors occur after the lapse of sufficient time and the relation lasts long. The value of product of labour in traditional sector becomes larger than that in modern sector. In the other case, even after the lapse of sufficient time, the imputed price of investment is larger than the marginal social value of consumption of product of modern sector. Whether one of two cases occurs depends on the production technologies of two sectors, the depreciation rate of capital stock and the social discount rate. These are the characteristics which the Marglin-Dixit-Stern model fails to take into account.

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It is well known that there were two marked characteristics of the monetary aspect of the Japanese economy during the post war period. The first one is the important role of bank deposit in the portfolio of households and bank loan to business firms. The second one is the large amount of central bank loan to private banks. The central bank loan was, on the one hand, a means to supply additional money. On the other hand, it was a means to directly influence loan market conditions and hence investment activities. It may then be conjectured that supplying money through such route had a strategic role in stimulating the economy's capital accumulation.
Monetary growth models so far have not dealt with effects of money supply of this type on capital accumulation in an economy where business investments are mainly financed by loans from private banks. In this paper I present a simple macro-model of such an economy and analyse the effects of central bank loans and other monetary policies on capital accumulation.

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