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Existence and uniqueness of equilibrium in a distorted dynamic small open economy

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  • Datta, Manjira

Abstract

We provide a set of sufficient conditions for existence and uniqueness of recursive equilibrium for a class of small open economies with distortion. The second welfare theorem is not available in this framework and usual approach for studying optimal neoclassical growth models is also not applicable.

Suggested Citation

  • Datta, Manjira, 2017. "Existence and uniqueness of equilibrium in a distorted dynamic small open economy," Economics Letters, Elsevier, vol. 152(C), pages 19-22.
    • Handle: RePEc:eee:ecolet:v:152:y:2017:i:c:p:19-22
    DOI: 10.1016/j.econlet.2016.12.001
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    References listed on IDEAS

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    1. Datta, Manjira & Mirman, Leonard J. & Reffett, Kevin L., 2002. "Existence and Uniqueness of Equilibrium in Distorted Dynamic Economies with Capital and Labor," Journal of Economic Theory, Elsevier, vol. 103(2), pages 377-410, April.
    2. Arnaud Costinot & Dave Donaldson & Jonathan Vogel & Iván Werning, 2015. "Comparative Advantage and Optimal Trade Policy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(2), pages 659-702.
    3. Datta, Manjira, 1997. "Externalities and Price Dynamics," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(3), pages 587-603, August.
    4. Kazuo Nishimura & Koji Shimomura, 2012. "Trade and Indeterminacy in a Dynamic General Equilibrium Model," Springer Books, in: John Stachurski & Alain Venditti & Makoto Yano (ed.), Nonlinear Dynamics in Equilibrium Models, edition 127, chapter 0, pages 347-361, Springer.
    5. Brecher, Richard A. & Chen, Zhiqi & Choudhri, Ehsan U., 2005. "Dynamic stability in a two-country model of optimal growth and international trade," Journal of Economic Dynamics and Control, Elsevier, vol. 29(3), pages 583-594, March.
    6. Jeffrey A. Frankel, 2003. "The Environment and Globalization," NBER Working Papers 10090, National Bureau of Economic Research, Inc.
    7. Fernandez, Linda, 2002. "Trade's Dynamic Solutions to Transboundary Pollution," Journal of Environmental Economics and Management, Elsevier, vol. 43(3), pages 386-411, May.
    8. Datta, M., 1992. "A general Model of Trade and Optimal Accumulation in a Small Open Economy: The Case of Production Uncertainty," Papers 92-8, Saskatchewan - Department of Economics.
    9. David Kohn & Fernando Leibovici & Michal Szkup, 2016. "Financial Frictions And New Exporter Dynamics," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 57, pages 453-486, May.
    10. Ben-David, Dan & B. Loewy, Michael, 2003. "Trade and the Neoclassical Growth Model," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 18, pages 1-16.
    11. Brown, Donald J. & Srinivasan, T. N., 2007. "The Gains from Trade Liberalization," Working Papers 24, Yale University, Department of Economics.
    12. Coleman, Wilbur II, 1997. "Equilibria in Distorted Infinite-Horizon Economies with Capital and Labor," Journal of Economic Theory, Elsevier, vol. 72(2), pages 446-461, February.
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    Cited by:

    1. Manjira Datta & Kevin Reffett & Łukasz Woźny, 2018. "Comparing recursive equilibrium in economies with dynamic complementarities and indeterminacy," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 66(3), pages 593-626, October.

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    More about this item

    Keywords

    Externality; Nonoptimal growth; Recursive equilibrium; Small open economy;
    All these keywords.

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • E19 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Other
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General

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