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Asset bubbles, labor market frictions, and R&D-based growth

Author

Listed:
  • Ken-ichi Hashimoto

    () (Graduate School of Economics, Kobe University)

  • Ryonghun Im

    () (Japan Society for the Promotion of Science, Research Fellowship for Young Scientists, Graduate School of Economics, Kobe University)

Abstract

Employing an overlapping generations model of research and development (R&D)-based growth with labor market frictions, this paper examines how employment changes induced by labor 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 labor 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 that have a negative influence on the labor market can lead to a bubble burst.

Suggested Citation

  • Ken-ichi Hashimoto & Ryonghun Im, 2016. "Asset bubbles, labor market frictions, and R&D-based growth," Discussion Papers 1642, Graduate School of Economics, Kobe University.
  • Handle: RePEc:koe:wpaper:1642
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    File URL: http://www.econ.kobe-u.ac.jp/RePEc/koe/wpaper/2016/1642.pdf
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    References listed on IDEAS

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    Cited by:

    1. Takuma Kunieda & Ken-ichi Hashimoto & Ryonghun Im, 2017. "Asset Bubbles, Unemployment, and a Financial Crisis," Discussion Paper Series 156, School of Economics, Kwansei Gakuin University, revised Feb 2017.

    More about this item

    Keywords

    overlapping generations; asset bubbles; labor market friction; employment rate; R&D;

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O42 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Monetary Growth Models

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