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A small open interregional monetary spatial economic growth with the MIU approach

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  • Wei-Bin Zhang

    ()
    (Ritsumeikan Asia Pacific University, Japan)

Abstract

We build an interregional monetary economic growth model with housing and environment for an open economy in a perfectly competitive economy. The monetary aspects of the model are based on the money-in-utility-function (MIU) approach. The real aspects of the model are influenced by the three most well-known models in the growth theory and urban economics in a multi-regional context. The industrial production follows the Solow model. Regional population distributes over the urban area according to the Alonso model and regional housing production follows the Muth model. We ac-cept a new approach to the microeconomic foundation for determining money holding, savings, spatial location and consumption. Following the traditional literature of small open economies, we assume that the rate of interest is fixed in international market. We explicitly solve the equilibrium of the mul-ti-regional economy. We also simulate the model and examine effects of changes in the rate of interest, the inflation policy, the preference, and amenity parameters on the long-term equilibrium structure of the multiregional spatial economy.

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Bibliographic Info

Article provided by Alexandru Ioan Cuza University, Faculty of Economics and Business Administration in its journal Analele Stiintifice ale Universitatii "Alexandru Ioan Cuza" din Iasi.

Volume (Year): 56 (2009)
Issue (Month): (November)
Pages: 210-234

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Handle: RePEc:aic:journl:y:2009:v:56:p:210-234

Contact details of provider:
Postal: Universitatea Al. I. Cuza; B-dul Carol I nr. 22; Iasi
Phone: 004 0232 201070
Fax: 004 0232 217000
Email:
Web page: http://anale.feaa.uaic.ro/anale/
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Related research

Keywords: model; economic growth; open economy;

References

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  1. Lane, Philip R., 2001. "The new open economy macroeconomics: a survey," Journal of International Economics, Elsevier, vol. 54(2), pages 235-266, August.
  2. Asami, Y. & Fujita, M. & Smith, T. E., 1991. "On the foundations of land use theory : Discrete versus continuous populations," Regional Science and Urban Economics, Elsevier, vol. 20(4), pages 473-508, February.
  3. Kollmann, Robert, 2002. "Monetary Policy Rules in the Open Economy: Effects on Welfare and Business Cycles," CEPR Discussion Papers 3279, C.E.P.R. Discussion Papers.
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  6. Wei-Bin Zhang, 2008. "Growth and residential distribution with economic structure and amenity: A synthesis of Solow-Uzawa's growth, Alonso's urban, and Muth's housing models," Papers in Regional Science, Wiley Blackwell, vol. 87(2), pages 277-303, 06.
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  12. Wei Bin Zhang, 2008. "A multi-region economic growth model with migration, housing and regional amenity," Analele Stiintifice ale Universitatii "Alexandru Ioan Cuza" din Iasi - Stiinte Economice, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 55, pages 322-350, November.
  13. Borck, Rainald & Pflüger, Michael P., 2004. "Agglomeration and Tax Competition," IZA Discussion Papers 1033, Institute for the Study of Labor (IZA).
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  18. Braid, Ralph M., 2001. "Spatial Growth and Redevelopment with Perfect Foresight and Durable Housing," Journal of Urban Economics, Elsevier, vol. 49(3), pages 425-452, May.
  19. Kollman, R., 1996. "The Exchange Rate in a Dynamic-Optimizing Current Account Model with Nominal Rigidities: A Quantitative Investigation," Cahiers de recherche 9614, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
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  22. Mills, Edwin S. & Nijkamp, Peter, 1987. "Advances in urban economics," Handbook of Regional and Urban Economics, in: E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 2, chapter 17, pages 703-714 Elsevier.
  23. Upton, Charles, 1981. "An equilibrium model of city size," Journal of Urban Economics, Elsevier, vol. 10(1), pages 15-36, July.
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