A Tale of Two Motives: Endogenous Time Preference, Cash-in-Advance Constraints and Monetary Policy

This paper demonstrates the effects of modeling an endogenous rate of time preference and two cash-in-advance constraints. If the constraint is levied on consumption and capital goods, time preference effects are neutral and cash-in-advance constraint effects invert the Tobin Effect. If the constraint applies solely to consumption goods, opposing motives are offsetting and monetary policy is super neutral.

A Tale of Two Motives: Endogenous Time Preference, Cash-in-Advance Constraints and Monetary Policy

This paper demonstrates the effects of modeling an endogenous rate of time preference and two cash-in-advance constraints. If the constraint is levied on consumption and capital goods, time preference effects are neutral and cash-in-advance constraint effects invert the Tobin Effect. If the constraint applies solely to consumption goods, opposing motives are offsetting and monetary policy is super neutral.

A model of the supplier involvement in the product innovation

In this paper we examine the product innovation in a supply chain by a supplier and derive a model for a supplier?s product innovation policy. The product innovation of a supplier can contribute to the long-term competitiveness for the supply chain, and as it is for many supply chains a major factor, it should be considered in the development of strategies for a supplier. Here, we evaluate the effectiveness of supplier product innovation as a strategic tool to enhance the competitiveness and viability of supply chain. This paper explores the dynamic research performance of a supplier with endogenous time preference under a given arrangement of product innovation. We find that the optimal effort level and the achieved product innovation obey a saddle point path, or show tremendous fluctuations even without introducing the stochastic nature of product innovative activity. We also find that the fluctuation frequency is largely dependent both on the supplier?s characteristics such as supplier?s product innovative ability and on the nature of product innovation process per se. Short-run analyses are also made on the effect of supply chain cooperation in the product innovation process.

Harberger-Laursen-Metzler Effect with Modified Becker-Mulligan Preference by Dynamic Optimization

We investigate the effects of terms-of-trade shocks on the spending and current account where households with the modified Becker-Mulligan endogenous time preference maximize their utility over an infinite planning period. Our results show that, with the modified Becker-Mulligan preference, the effect of the deterioration in terms of trade on the current account depends on people’s characters. However, with the second preference we have considered, the deterioration in terms of trade will result in a current account deficit, which is the same as Obstfeld (1982), where households with Uzawa endogenous time preference are considered; deterioration in terms of trade leads to a decline in the current account. These theoretical results are consistent with the empirical evidence by numerical simulations.

A NOTE ON ENVIRONMENT-DEPENDENT TIME PREFERENCES

In this paper we investigate the growth effect of environmental taxes when time preference is endogenously determined by environmental quality. We find that if people become more patient because of a cleaner environment, raising the environmental tax may reduce pollution and stimulate growth. Moreover, the Pigouvian principle may be inefficient in the presence of endogenous time preference.