Kazumichi Iwasa’s research while affiliated with Kobe University and other places

What is this page?


This page lists works of an author who doesn't have a ResearchGate profile or hasn't added the works to their profile yet. It is automatically generated from public (personal) data to further our legitimate goal of comprehensive and accurate scientific recordkeeping. If you are this author and want this page removed, please let us know.

Publications (30)


Indeterminacy in a model with production externality and inferiority in consumption
  • Article

September 2021

·

14 Reads

·

2 Citations

International Journal of Economic Theory

Kazumichi Iwasa

·

We study the dynamic property of a constant returns two‐sector model with sector‐specific externality. In this study, we consider two types of consumption good, one of which is a pure consumption good and the other is a consumable capital good. Then, we examine the case where households tend to consume more pure consumption goods and consume less consumable capital ones. We show that if a consumable capital good is inferior it is possible that indeterminacy occurs around a steady state without capital intensity reversal between the private and the social levels.


Time preference and international trade

December 2020

·

36 Reads

·

2 Citations

International Journal of Economic Theory

We first consider a closed model, where households' time discount depends on externality in consumption. We can prove that there is a unique steady state, which is a saddle point. Then we extend the model to a two‐country world, and derive the condition on the effects of consumption externality under which there is a unique free trade steady state with saddle‐point stability.


Trade and indeterminacy revisited

December 2018

·

14 Reads

·

1 Citation

International Journal of Economic Theory

We consider a dynamic two‐country model of trade with production externalities with an emphasis on the possibility of global indeterminacy, which means that the distribution of capital stocks in each country in the long run depends on households’ expectations. Opening trade yields expectation‐driven fluctuations. Global indeterminacy may occur around the free trade steady states even when the autarkic steady states are saddle points in both countries, and it must happen when local indeterminacy occurs around the autarkic steady states in both countries.


Discrete dynamics in a two-country model with a durable good

September 2015

·

22 Reads

Journal of Difference Equations and Applications

In this paper, we extend Doi et al. (2007) in the sense that households in both countries consume a durable good. Although this generalization makes the model much complicate, it will be shown that under the standard Cobb–Douglas preferences, the model has a unique steady state and saddle-point stability.


Dynamic two-country Hecksher–Ohlin model with externality

March 2014

·

46 Reads

·

11 Citations

International Journal of Economic Theory

We extend a dynamic Heckscher–Ohlin model with production externality presented in recent work by Nishimura and Shimomura by assuming a consumable capital good. Following work by Bond, Iwasa, and Nishimura, we define a steady-state excess demand function and derive the locus of home and foreign capital stocks that are consistent with a steady-state equilibrium under free trade. Also, we examine the relationship between externality and local dynamics in autarky or under free trade, which includes a phase diagram analysis. Then we show that opening trade can generate expectation-driven fluctuations in a world trade market.


POVERTY TRAPS and INFERIOR GOODS in A DYNAMIC HECKSCHER-OHLIN MODEL

September 2013

·

62 Reads

·

7 Citations

Macroeconomic Dynamics

We extend the dynamic Heckscher–Ohlin model in Bond et al. [Economic Theory (48, 171–204, 2011)] and show that if the labor-intensive good is inferior, then there may exist multiple steady states in autarky and poverty traps can arise. Poverty traps for the world economy, in the form of Pareto-dominated steady states, are also shown to exist. We show that the opening of trade can have the effect of pulling the initially poorer country out of a poverty trap, with both countries having steady state capital stocks exceeding the autarky level. However, trade can also pull an initially richer country into a poverty trap. These possibilities are a sharp contrast with dynamic Heckscher–Ohlin models with normality in consumption, where the country with the larger (smaller) capital stock than the other will reach a steady state where the level of welfare is higher (lower) than in the autarkic steady state.


Giffen Behavior Independent of the Wealth Level

July 2012

·

57 Reads

·

29 Citations

Economic Theory

We demonstrate that a well-behaved utility function can generate Giffen behavior, where “well-behaved” means that its indifference curves are smooth, convex, and closed in a commodity space; the resulting demand function of each good is differentiable with respect to prices and income. Moreover, we show that Giffen behavior is compatible with any level of utility and an arbitrarily low share of income spent on the inferior good. This contrasts sharply with the common view that the Giffen paradox tends to occur when households’ wealth levels are low.


Multiple Equilibria in a Dynamic Two Country Model

January 2012

·

16 Reads

Some market distortional factors such as factor-generated externalities and imperfect competition can give rise to multiple equilibrium paths, or indeterminacy, in dynamic general equilibrium models. Despite numerous studies on indeterminacy in two-country models, it is assumed that either market distortional factors or inferiority in consumption (one good is an inferior good at the steady state) will make indeterminacy possible. This chapter considers a dynamic two-country model with technological differences and illustrates how indeterminacy can arise even without any market distortional factor and inferiority in consumption. In cases where a pure consumption good is more labour-intensive than a consumable capital good, the chapter demonstrates that multiple equilibrium paths arise when the former is inferior. In cases where a pure consumption good is more capital-intensive than a consumable capital good, multiple equilibrium paths can arise even when both goods are normal.


A Dynamic Heckscher-Ohlin Model and Inferior Goods

December 2011

·

44 Reads

·

1 Citation

Asia-Pacific Journal of Accounting & Economics

Under the assumption that a pure consumption good is labor intensive, we examined the properties of a two-country dynamic Heckscher-Ohlin model that allows for preferences to be non-homothetic (Bond et al. (2009)). In this paper, we assume that a pure consumption good is capital intensive and study the properties of the model. If both goods are normal, each country will have a unique autarkic steady state, and all steady state equilibria are saddle points. We also consider the case in which one good is inferior, and show that this can lead to multiple autarkic steady states and the possibility of inderminacy under free trade as in Bond et al. (2009).


Software Provision and the Impact of Market Integration

September 2011

·

19 Reads

Review of International Economics

Both deeper market integration and advances in digital technology have driven particularly large decreases in the costs of intermarket software provision. This study first explains the mechanism of how trade costs influence the software provision decisions of software firms. Then the transformation of production/trade patterns is investigated given gradually decreasing trade costs for software products. It is shown that if two incompatible types of hardware exist, deeper market integration may reduce the variety of hardware technologies. It is also shown that, if the variety of hardware technologies is reduced by deeper integration, some consumers are made worse off.


Citations (14)


... Benhabib et al. (2000) considered an endogenous growth model with production externalities and showed that indeterminacy can arise without assuming preferences to be close to linear. Recently,Iwasa and Nishimura (2015) showed that without the factor intensity reversal, indeterminacy can arise in a closed economy model, if there is inferiority in consumption. ...

Reference:

Trade and indeterminacy revisited
Indeterminacy in a model with production externality and inferiority in consumption
  • Citing Article
  • September 2021

International Journal of Economic Theory

... Other examples of customs union are Eurasian Customs Union, Caribbean Community, Central American Common Market and so forth. 3 The literature on customs union is quite wide in its coverage starting from the seminal works of Kemp and Wan (1976), Lipsey (1957), Ohyama (1972), Viner (1950) and others to relatively recent works of Goyal and Joshi (2006), Grossman (2016), Iwasa et al. (2008), Maggi (2014), McLaren (2002), Qi and Shimomura (2009), Saggi and Yildiz (2010), Sykes (2016), Venables (2001) and so forth. Grossman (2016) in his work has mentioned that any discussion on incentives for trade agreements among a few countries must start from the renowned Ohyama-Kemp-Wan theorem (Kemp & Wan, 1976;Ohyama, 1972). ...

Chapter 10 Pareto-Improving Trading Clubs without Income Transfers
  • Citing Chapter
  • January 2008

... In this section, we formulate a standard two-sector model, except that there is production externality and households have non-homothetic preferences, which is the same model as developed in Iwasa and Nishimura (2014). In the model, there are two goods that are produced by a fixed factor (labor, l) and a reproducible factor (capital, k). ...

Dynamic two-country Hecksher–Ohlin model with externality
  • Citing Article
  • March 2014

International Journal of Economic Theory

... There are also several studies on multiple steady states and the timing of market openings. Atkeson and Kehoe (2000) and Bond et al. (2013) focus on capital stock at the timing as our focus: bequest (in units of capital) of individuals with middle abilities at the timing. Atkeson and Kehoe (2000) show that the aggregate income level is low (high) in the long run if the country begins international trade before (after) the economy is well developed, as measured by capital stock. ...

POVERTY TRAPS and INFERIOR GOODS in A DYNAMIC HECKSCHER-OHLIN MODEL
  • Citing Article
  • September 2013

Macroeconomic Dynamics

... In our recent studies, Bond et al. [2], [3], and [4], we investigate the properties of a dynamic H-O model with non-homothetic preferences, where there are two goods one of which is a pure consumption good and the other is a consumable capital good. 1 We showed that if labor productivities and discount factors are the same across countries and the labor intensive good 2 is normal in consumption, then the main results of the benchmark H-O model will hold. The primary di¤erence 1 With respect to the production side, our analysis is based on the fundamental structure of the H-O model, which was …rst noted in Jones [8], also see his recent work Jones [9]. 2 As shown in Bond et al. [4], the factor intensity ranking between two sectors does not a¤ect the results in our studies. ...

A Dynamic Heckscher-Ohlin Model and Inferior Goods
  • Citing Article
  • December 2011

Asia-Pacific Journal of Accounting & Economics

... This result occurs because aggregate savings depend both on the ratio of consumption to capital and on the gap between the interest rate and the subjective discount rate in the perpetual youth model. Recently, Hamada, Iwasa and Kikuchi (2009) employ the Blanchard (1985) perpetual youth model and analyze trade patterns in dynamic two large country model where each country has a different discount rate. They show that even with different subjective discount rates, both countries can be incompletely specialized in the long-run. ...

Trade and Capital Movements between Countries with Different Discount Rates in a Model of Perpetual Youth
  • Citing Article
  • May 2009

... According to the study, inferiority and also Giffen behavior in basic foods are more likely to be seen in the purchases of those individuals who have escaped the utmost poverty of the society. Doi et al. (2009), by presenting a suitable utility function, concluded that Giffen behavior was independent of income share of the inferior good and could be found in all income classes, not only for the poor. ...

Giffen Behavior Independent of the Wealth Level
  • Citing Article
  • July 2012

Economic Theory

... Zhang [69] found that the increase in the level of internet use actively promoted the growth of China's ST. DT has effectively reduced the cost of service provision [70], and the distance cost of ST has been reduced with the development of the internet and improved connectivity between countries [71]. On the basis of greatly improving the cross-border trade ability of services [72], DT has actively promoted the transformation of the ST mode and the form of industrial organization. ...

A Simple Model of Service Trade with Time Zone Differences
  • Citing Article
  • January 2010

International Review of Economics & Finance

... world market occurs. In two-country models with an inferior consumption good and without production externality, Nishimura and Shimomura (2006) and Bond et al. (2011) find that indeterminacy can arise due to the lack of international lending and borrowing. ...

A Dynamic Two Country Heckscher-Ohlin Model with Non-Homothetic Preferences
  • Citing Article
  • Full-text available
  • January 2009

Economic Theory