This paper explains the quasi-fixed relationship between labors and employers in the economy where the imperfect information about the quality of labors dominates and how the extent of the quasi-fixity of labors to a specific firm is determined. Also the impact of the educational information on the efforts to the "on-the-job filtering" by employers and the possibility of "right man in the right job" in the economy are analysed. In this model there exist two different types of labors and jobs ("good" job and "bad" job), and each labor exercises his higher productivity in the right job. Employers who want to know the correct type of labors utilize not only the educational information but also the "on-the-job monitoring" information. Once an employee has been hired, the employer can gradually draw on more directly obtained information to meter his productivity. This information makes his employee different from the others, and the value of his employee increases as the employer accumulates the gathered information. As an important conclusion I stress that in a certain plausible condition the more the educational information is informative, the more employers make the on-the-job filtering systems informative to the labors carrying out good jobs and the less to the labors carrying out bad jobs. This situation is unhappy especially for the labors who are able and failed in acquiring the advantageous career on education.
This paper is concerned with the behavior of a monopolistic firm with production flexibility (in the sense of Turnovsky ) under demand uncertainty. Effects of "disequilibria" phenomena such as inventory holding & unsatisfied demand are explicitly analyzed. Main results are as follows: (1) Even if the firm is able to revise its production plan after learning the true state, it will not necessarily determine the production level so as to equate supply to demand (Section 3). (2) The behavior of a risk-neutral firm under uncertainty will in general differ from the behavior of the risk-neutral firm under certainty (Section 4). And the behavior of a risk-averse firm under uncertainty will in general differ from the behavior of a risk-neutral firm under uncertainty (Section 5). The direction of these responses will depend upon the nature of demand & cost functions these firms face (Section 4, Section 5).
It is intended in this paper to analyze a phenomenon, so called wage-price spiral, in terms of a simple growth model. In our economy, it is supposed that the commodity market is oligopolistic and each firm sets price in order to get the objective rate of profit which is determined according to the investment plan. On the other hand, money wage rate is settled by collective bargainning between firms and laborers who claim their desirable real wage rate. Hence, if firms fail to get the objective rate of profit, they raise prices, while laborers call for higher money wage in case of their desirable real wage rate not being attained. In the long run, it will be shown that our economy converges to a steady growth path or a cyclical one. When neither firms' nor laborers' requirements are fulfilled, it is inevitable that wage-price spiral occurs on the steady or the cyclical growth path.
Some authors have studied the economic growth that are the results of alternative full employment policy. But they had no consideration for the balance of budget. The first purpose of this paper is a extension of their studies to a model in which public investment and public debt exists. The second purpose is a reconsideration of 'the burden of the debt' in the sense of Domar. The main assumption are as follows. 1. Output capacity Q is a Cobb=Dougras function of social overhead capital Kp, private capital K, labor L and state of technique, i. e., Q=beμtKραKβLτ.α+β<1. 2. Nelson-type investment function and Cornwall-type approac. 3. New issue amount of public debt is deficit of government. 4. Constant rate of interest and complete competition in labor market. 5. Government has three fiscal control variables, i. e., government consumption rate g, tax rate z, public invest rate p. Government can realize full employment growth by means of to change one of them with constant other variables. The main results are as follows. 1. In views of long run efficiency of resource allocation and 'the burden of national debt, ' the most desirable policy is the full employment policy which change z (with constant g and p), the second best policy is the policy which change g, and the worst policy is the full employment policy which change p (with constant z and g). 2. High interest rate policy is dangerous policy in views of efficiency of resource allocation and 'the burden of national debt.'
We have attempted to formulate a model where new aspects of the assignment problem can be analyzed under a kind of managed flexibility in exchange rates, and have seen ; that the traditional policy assignment calls for a different approach as we depart from the fixed rate system. ; that the step-by-step alteration in the exchange rate as an additional policy brings a wider scope of stabilizing an open economy than the hitherto analyzed framework would provide. ; that some of the Mundellian assignment would not be viable in a new environment. ; that the general assignment, which has not been so far investigated by writers, can be analyzed. ; that the assignment of the adjustment in the exchange rate to the internal balance, which has become the target of criticism, is not always inappropriate.
Savings are said to reduce their value under hyper-inflation in daily conversation. Economic Planning Agency and Zensen-Domei propose different deflators for savings and different formulas for the rate of value reduction in savings. These two methods lack theoretical reasoning. This paper defines an intertemporal and an atemporal consumer price index, following Pollak, and points out the followings. The intertemporal CPI is the suitable deflator for assets such as savings, whereas the theoretical concept of the official CPI is atemporal. The ratio of the intertemporal to atemporal CPI depends on the expected rate of inflation and the interest rate. The atemporal CPI underestimates the intertemporal CPI under hyper-inflation or low interest rate. The rate of value reduction in savings is defined and is related to the savings' deflator. The problems involved in the Economic Planning Agency and the Zensen-Domei methods are pointed out.
In their well-known analysis of fiscal stabilization policies , Blinder and Solow clarify the meaning of the government budget constraint. However, the transitional, dynamic process by which government expenditures are transmitted is not explicitly considered. The purpose of this paper is to explore implications of the adjustment process of income in the analysis of a bond-financed increase in government expenditures. In the IS-LM framework, income is instantaneously determined at the intersection of the IS and the LM curves, while stock variables such as bond balances, money balances, and physical capital are assumed to be constant. As the result of public expenditures, income increases instantaneously. If the impact government spending multiplier, 1/(1-marginal propensity to spend) is sufficiently large, the instantaneous increase in tax revenues will create the government budget surplus at the initial moment. The government budget constraint implies that the surplus is turned to the redemption of bonds. Since we are concerned with the effect of bond-financed budget deficits on income, the case in which government spending leads to a budget surplus at the initial moment is neither interesting nor relevant. Blinder and Solow assume away this troublesome case by omitting income from the investment function in order to lower the marginal propensity to spend. we shall present a more generalized framework and consider the case where induced investment is allowed. We shall explicitly introduce an adjustment process in the commodity market, so that fiscal expenditures increase tax revenues only with delay. In this way we can avoid the complications noted above, and at the same time explicitly consider the time development of the system. Contrary to the conclusion by Blinder and Solow that the additional changes in bonds have a positive net effect on income if the system is stable, we shall show in our generalized framework that the subsequent effects may be contractionary even if the system is stable. Thus, Blinder and Solow's conclusion holds on narrower grounds than they seem to claim; that is, only when the parameter of policy is government purchases of goods and services and the marginal propensity to spend is sufficiently weak. As regards the steady-state multiplier considered, it will be shown that the positive wealth effect on consumption is a necessary condition for the effectiveness of fiscal policy. The question as to whether or not the wealth effect is positive is not at all out of place here. However, the long-standing Keynesian-monetarist controversy concerning whether or not the impact effect of the increase in bonds on effective demand, EB, is positive has no bearing on the analysis of the steadystate multiplier, because the sign of EB is not relevant to the long-run effectiveness of fiscal policy. In Model II (the parameter of policy is government expenditure including interest payments), even if EB is negative, it is still possible for the system to be stable and for fiscal policy to be effective. As regards the dynamic adjustments under bond finance considered, we shall show in our consideration of the adjustment process that fiscal policy is normally effective during the initial phase where the government budget remains at a deficit, as long as the impact effect of the increase in bonds is positive. Fiscal policy in depression mostly corresponds to the situation where the government budget is in deficits. Therefore, in most of the relevant cases to be encountered, fiscal policy can be deemed to be effective in spite of some less favorable implications to be found in the paper.
Suppose that we are in an exchange economy where prices of all commodities are fixed arbitrarily. If such prices are fortunately equal to the Walrasian equilibrium ones, then each consumer can realize his demands and supplies which are most preferable in his budget set. But if not, that happy situation can not be observed. That is, under such fixed-prices, the market clearance can not be compatible with the utility-maximization of consumers. In his brilliant paper , Benassy introduces the rationing at markets and the expectation on quantity constraints by each consumer, and shows that there is a state of economy, K-equilibrium, where consumers can trade with each other under given prices. Benassy's paper has become a part of the basic literature in the general disequilibrium theory which is currently growing. It is our purpose in this note to clarify one point which remains still ambiguous in Benassy's theory of disequilibrium.