International Impact of Productivity Shocks with Endogenous Labor Supply: The Two Large Economy Case
AbstractThe study constructs a deterministic, overlapping-generations, two-economy model. The analysis is conducted in the context of an infinitely-lived economy where individuals have finite (two-periods) lifetimes. The model shows that a positive productivity shock produces positive correlation between savings and investment despite the fact that there is perfect international capital mobility. F u rt h e r, the simulation results show that the endogeneity of the labor supply gives rise to cyclical adjustment of the economy towards its steady state.
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Bibliographic InfoArticle provided by Center for Economic Integration, Sejong University in its journal Journal of Economic Integration.
Volume (Year): 13 (1998)
Issue (Month): ()
International Impact; Productivity Shocks;
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- F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
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