The transfer paradox in a one-sector overlapping generations model
AbstractThis paper examines the effects of international income transfers on capital accumulation and welfare in a one-sector overlapping generations model. It is shown that a strong form of the transfer paradox - in which the donor country experiences a welfare gain while the recipient country experiences a welfare loss - may occur both in and out of steady state. In addition, it is shown that a weak form of the transfer paradox - where either the donor or recipient (but not both) experiences a paradoxical welfare effect - may characterize all segments of the transition path not already characterized by the strong transfer paradox.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Dynamics and Control.
Volume (Year): 32 (2008)
Issue (Month): 6 (June)
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Web page: http://www.elsevier.com/locate/jedc
Other versions of this item:
- Partha Sen & Emily T. Cremers, 2007. "The Transfer Paradox in a One-Sector Overlapping Generations Model," Working papers 159, Centre for Development Economics, Delhi School of Economics.
- Partha Sen & Emily T. Cremers, 2010. "The Transfer Paradox in a One-Sector Overlapping Generations Model," Working Papers id:2851, eSocialSciences.
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
- F35 - International Economics - - International Finance - - - Foreign Aid
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
- O19 - Economic Development, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
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