Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/230500
Authors: 
Hashimoto, Ken-ichi
Im, Ryonghun
Kunieda, Takuma
Shibata, Akihisa
Year of Publication: 
2020
Series/Report no.: 
ISER Discussion Paper No. 1096
Abstract: 
A tractable model with infinitely lived agents is constructed for the examination of bubbles and unemployment. It is demonstrated that the presence of bubbles stimulates capital accumulation and reduces unemployment. The presence of bubbles also changes the effects of government policies that target unemployment and welfare conditions in the labor market. The main findings are as follows: (i) the presence of bubbles is more beneficial to an economy with severe credit constraints; (ii) the presence of bubbles mitigates the negative effects of taxation and unemployment benefits on unemployment and welfare; and (iii) these mitigation effects decrease as credit constraints are relaxed.
Subjects: 
Asset bubbles
Unemployment
Labor-market matching frictions
Financial frictions
JEL: 
J64
O41
O42
Document Type: 
Working Paper

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