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The Impact of Imported Energy and Goods Prices on Growth and Trade Balance of a Small Open Economy

Author

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  • Zhang, Wei-Bin

    (Ritsumeikan Asia Pacific University)

Abstract

This study builds a growth model of a small open economy with imported energy and goods in a perfectly competitive economy. The economy is composed of one industrial sector and one service sector. The economy is endowed with constant labor and land. The growth mechanism is basically neoclassical in the sense that the main determinant of growth is endogenous wealth. This study is mainly concerned with the effects of changes in capital cost, energy price and price of imported goods on trade balance, price of services, land rent, and path of economic growth. The comparative dynamic analysis provides some insights into the impact of shocks on the national economy.

Suggested Citation

  • Zhang, Wei-Bin, 2017. "The Impact of Imported Energy and Goods Prices on Growth and Trade Balance of a Small Open Economy," Bulletin of Economic Theory and Analysis, BETA Journals, vol. 2(2), pages 99-116, June.
    • Handle: RePEc:ris:betajl:0010
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    Cited by:

    1. Wei-Bin Zhang, 2018. "Business Cycles, Growth, And Imported Energy In A Small-Open Growth Model," Oradea Journal of Business and Economics, University of Oradea, Faculty of Economics, vol. 3(2), pages 7-21, September.

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    More about this item

    Keywords

    Price of Energy; Price of Imported Goods; Propensity to Consume Foreign Goods; Propensity to Save; Small Open Economy;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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