The neutrality and optimality of countercyclical monetary policy are examined in a representative linear economy featuring competitive equilibria in multiple markets, a single asset, a general monetary feedback rule and rational expectations based on a general representation of private information. Four propositions are developed: (1) a necessary and sufficient condition for the countercyclical neutrality of monetary policy under all possible forms of private information in such an economy is stated in terms of restrictions on the parameters of the monetary feedback rule; (2) a necessary and sufficient condition for countercyclical neutrality under common incomplete information is developed as a corollary; (3) a necessary and sufficient condition for the allocational neutrality of monetary policy is stated in terms of an alternative set of parameter restrictions; (4) optimal monetary feedback is fully characterized and shown to completely stabilize deviations in market output by eliminating the influence of those current stochastic innovations agents cannot directly observe from the expectations formed by agents. These conditions also serve to unify the diverse propositions about monetary neutrality and optimality in linear equilibrium macroeconomic models appearing in Barro (1976), Barro and Fischer (1976), Asako (1982), King (1982), Waldo (1982), Marini (1985), Andersen (1986), and Nickerson (1987).

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Targeting nominal income is sometimes advocated over targeting money supply because the former is simply one step closer to the ultimate goal of the stabilization of real economic activity. The unsatisfactory records of achieving the money supply target itself are often criticized as well by the advocates of nominal income targeting. In this note, I shall show that the imprecise controllability of money supply per se is a factor against, rather than for, targeting nominal income. The presence of multiplier uncertainty leads to a similar conclusion.

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The APT is recast as a general theory of arbitrage asset valuation in a model with diffusion factors and rational expectations. Defining betas by factor elasticities of asset prices, the APT-type arbitrage-free condition is reformulated in terms of asset price function. The condition reduces to a partial differential equation with respect to the asset valuation function. The price function, as a solution of this equation, takes two alternative forms depending on how to design risk-adjustment. The resulting formulae consistently demonstrate the various existing ideas of arbitrage asset evaluation.

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The purpose of this paper is to specify a class of equity criteria which always qualify the Lindahl equilibrium states as fair. These equity criteria will be defined in terms of virtual amounts of goods. Also they have to satisfy some fundamental properties to be considered as relevant to equity criteria in general. Eventually it will be shown that such equity criteria are specified to the extent that each of them may be regarded as a generalization of the L-equity criterion.

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This paper develops and estimates a model of Japanese aggregate homeownership rates using annual data for 1958-78 to study the determinants of owner-occupancy rates as well as the effect of inflation on housing tenure choice.
We construct the relative prices of owned and rented housing based on the Japanese system.
The estimated results suggest that the capital market is imperfect and also that changes in the Japanese aggregate homeownership rates after 1958 are greatly influenced by demographic and social factors.

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This paper examines Harrodian instability by using the model in which a representative firm maximizes its own profit rate taking a subjective demand function into account. The subjective demand function considered by the firm contains the aggregate demand of economy as an important parameter. This implies that the firm would pay attention to the economic state as a whole. The analysis based on this model shows that its stationary state can be asymptotically stable or there can exist closed cycles around the stationary state in spite of Harrodian investment behavior. Applying the Hopf bifurcation theorem we can demonstrate such character of the dynamic system considered in this paper. Disequilibrium may take place at the stationary state, hence, we call the fluctuation "quasi growth cycle."

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