Ken-Ichi Hashimoto

Employing an overlapping generations model of R&D‐based growth with labour market frictions, this paper examines how employment changes induced by labour market frictions influence asset bubbles and long‐run economic growth. Asset bubbles can (cannot) exist when the employment rate is high (low), which leads to higher (lower) economic growth through labour market efficiency. We also explore the steady state and transitional dynamics of bubbles, economic growth and employment. Furthermore, we show that policy or parameter changes with a negative influence on the labour market can lead to a bubble burst.

This paper considers how national corporate tax policy affects productivity growth through adjustments in geographic patterns of industry in a two‐country model of trade. With trade costs and imperfect knowledge spillovers between countries, production concentrates partially and innovation concentrates fully in the country with the lowest tax rate. A rise in the international corporate tax differential accelerates productivity growth through an increase in the production share of the low‐tax country that improves knowledge spillovers from industry to innovation. The paper also investigates the relationship between the corporate tax differential and the level of market entry, and analytically characterizes the effects of changes in tax policy on national welfare. (JEL F43, O30, O40, R12)

We construct a continuous-time overlapping-generations model with labour market frictions to examine the relationships among unemployment, asset bubbles, and economic growth. We show that the existence of asset bubbles is contingent upon the unemployment rate: a bubble (non-bubble) regime arises in equilibrium when unemployment is relative low (high). Our framework focuses on the boom and bust of asset bubbles caused by changes in fundamental variables, not a stochastic probability. Then, as labour market frictions generate a negative relationship between the unemployment rate and economic growth, we find that the bubble regime exhibits a higher growth rate than the non-bubble regime. Furthermore, we show that policy or parameter changes that have a positive influence on the labour market shift the economy from a non-bubble regime to a bubble regime.