Takashi Onoda

Welcome to my website! I am an economist at Japan Bank for International Cooperation  (JBIC) and a visiting researcher at TDB Center for Advanced Empirical Research on Enterprise and Economy at Hitotsubashi University.  I received my Ph.D. in economics from the University of Chicago in 2021

My research interests include international economics, spatial economics, and political economy.

Here is my CV.

Email: t-onoda [at] jbic.go.jp / onoda.takashi [at] gmail.com

Working Papers

Cities’ Demand-driven Industrial Composition     [PDF (August 2023)]      [Japanese article]

I show that large cities specialize in income-elastic industries. To explain this pattern, I develop a model of cities with industries that differ in their tradability and income elasticity of demand. Industry-neutral productivity differences generate the specialization pattern through the home-market effect. A more productive city is larger, pays higher wages, and specializes in income-elastic industries. When the industries are gross complements, or the tradable industries are income-elastic, the tradable industries command greater shares of employment and expenditure in the larger city, amplifying regional income inequality.

Gradual Development and Rough Transition of Cooperation with Reference Dependence  [PDF (August 2023)

I study cooperation among reference-dependent and loss-averse players in a dynamic game with complete information. Every period, players choose their cooperation levels that determine their intrinsic payoffs and update their reference points in a backward-looking way. I characterize the subgame-perfect equilibrium that maximizes the utility with Nash reversion and show that the development of cooperation exhibits gradualism. After initiating cooperation, players experience higher payoffs than their initial reference points. Consequently, the reference points rise, making a penalty more severe for a deviation and enabling further cooperation. This paper additionally illustrates how the developed cooperation responds to a structural shock. When a steady-state cooperation level shifts down, transitioning to the new level entails a loss. This loss generates an additional deviation incentive, and the players undergo cooperation lower than the new steady-state level.

Work in Progress

Heterogenous Tradable Sector Shares and Wages

A model with heterogeneous income elasticities implies that tradable sector shares affect income inequality across locations by driving the home market effect. I provide empirical evidence of this with U.S. CBSA-level data. The model also shows that the effect on cross-location income inequality of a trade cost reduction can be the opposite depending on whether it is uniform or sector-specific. When an income-elastic sector transitions from non-tradable to tradable, income inequality tends to rise. I empirically suggest that the disproportionate trade cost reduction of business services, through this effect, has been supporting a stable city-size wage premium since 1980.

Persistence of Non-democratic Regimes and Reputation

I develop a model that demonstrates how the reputation of a military can generate different paths of political transitions. When a military has a reputation for not holding on to power for a long time, citizens can tolerate frequent coups. A military with such a reputation voluntarily democratizes to maintain its reputation. This equilibrium replicates the characteristics of the political transition paths of countries like Thailand. When there is no such reputation, the citizens resist a coup to avoid a non-democratic regime. Once the military seizes power, it will never voluntarily democratize, and the non-democratic regime becomes persistent. I show that citizens can choose the combination of frequent coups and voluntary democratizations over buying out their military.