Trade and Indeterminacy in a Dynamic General Equilibrium Model
AbstractThis paper introduces sector-specific externalities in the Heckscher-Ohlin two-country dynamic general equilibrium model to show that indeterminacy of the equilibrium path in the would market can occur. Under certain conditions in terms of factor intensities, there are multiple equilibrium paths from the same initial distribution of capital in the world market, and the distribution of capital in the limit differs among equilibrium paths.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Theory.
Volume (Year): 105 (2002)
Issue (Month): 1 (July)
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Web page: http://www.elsevier.com/locate/inca/622869
Other versions of this item:
- Koji Shimomura & Kazuo Nishimura, 2001. "Trade and Indeterminacy in a Dynamic General Equilibrium Model," Discussion Paper Series 117, Research Institute for Economics & Business Administration, Kobe University.
- E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
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- Jess Benhabib & Qinglai Meng & Kazuo Nishimura, 2000.
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- M. Yano, 2010. "The Turnpike of Dynamic General Equilibrium Paths and its Insensitivity to Initial Conditions," Levine's Working Paper Archive 1394, David K. Levine.
- Yano, Makoto, 1984. "The turnpike of dynamic general equilibrium paths and its insensitivity to initial conditions," Journal of Mathematical Economics, Elsevier, vol. 13(3), pages 235-254, December.
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- Kamihigashi, Takashi, 2001. "Necessity of Transversality Conditions for Infinite Horizon Problems," Econometrica, Econometric Society, vol. 69(4), pages 995-1012, July.
- Zhiqi Chen, 1992. "Long-Run Equilibria in a Dynamic Heckscher-Ohlin Model," Canadian Journal of Economics, Canadian Economics Association, vol. 25(4), pages 923-43, November.
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