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Terms-Of-Trade And The Current Account: A Two-Country/Two-Sector Growth Model

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Author Info
María Dolores Guilló () (Universidad de Alicante)

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Abstract

This paper examines the equilibrium relation, within the non-specialized area, between the current account and the terms-of-trade in a two-country/sector growth model. Along a convergent eqirilibrium path, this relation can have any sign depending on the trading sectors' relative factor intensities and on the steady state relative price slopes of demand for and supply of investment goods. It is also shown that a negative association between capital accumulation and the terms-of-trade for the exporter of capital intensive goods does not require an import sector growing faster than the export sector.

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File URL: http://www.ivie.es/downloads/docs/wpasad/wpasad-1995-03.pdf
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File Function: Fisrt version / Primera version, 1995
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Publisher Info
Paper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number 1995-03.

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Length: 36 pages
Date of creation: Jan 1995
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Publication status: Published by Ivie
Handle: RePEc:ivi:wpasad:1995-03

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Keywords: Terrns-of-trade; Overlapping generations; Two-sector growth.;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Nikolai S. Kukushkin, 1993. "Cournot Oligopoly With "Almost" Identical Convex Costs," Working Papers. Serie AD 1993-07, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
  2. Begoña Subiza & Carmen Herrero Blanco, 1991. "A Characterization Of Acyclic Preferences On Countable Sets," Working Papers. Serie AD 1991-01, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
  3. Galor, Oded, 1992. "A Two-Sector Overlapping-Generations Model: A Global Characterization of the Dynamical System," Econometrica, Econometric Society, vol. 60(6), pages 1351-86, November. [Downloadable!] (restricted)
  4. Luis Corchón & Carmen Beviá Baeza, 1993. "On The Generic Impossibility Of Truthful Behavior: A Simple Approach," Working Papers. Serie AD 1993-06, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
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  5. Fernando Vega Redondo, 1993. "Shaping Long-Run Expectations In Problems Of Coordination," Working Papers. Serie AD 1993-05, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
  6. Fernando Vega Redondo, 1993. "Industrial Dynamics, Path-Dependence And Technological Change," Working Papers. Serie AD 1993-04, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
  7. Gonzalo Olcina Vauteren & Amparo Urbano Salvador, 1993. "INTROSPECTION AND EQUILIBRIUM SELECTION IN 2x2 MATRIX GAMES," Working Papers. Serie AD 1993-01, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
  8. Luis Corchón & Simon Wilkie, 1995. "Implementation Of The Walrasian Correspondence By Market Games," Working Papers. Serie AD 1995-02, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
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  9. Partha Sen & Stephen J. Turnovsky, 1989. "Deterioration of the Terms of Trade and Capital Accumulation: A Reexamination of the Laursen-Metzler Effect," NBER Working Papers 2616, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  10. Antonio Villar Notario & Carmen Herrero Blanco, 1990. "Vector Mappings With Diagonal Images," Working Papers. Serie AD 1990-01, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
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  11. Fernando Vega Redondo, 1991. "Competition And Culture In The Evolution Of Economic Behavior: A Simple Example," Working Papers. Serie AD 1991-08, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
  12. Carmen Herrero, 1997. "Endogenous reference points and the adjusted proportional solution for bargaining problems with claims," Social Choice and Welfare, Springer, vol. 15(1), pages 113-119. [Downloadable!] (restricted)
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  13. Herrero, Carmen & Marco, Maria Carmen, 1993. "Rational equal-loss solutions for bargaining problems," Mathematical Social Sciences, Elsevier, vol. 26(3), pages 273-286, November. [Downloadable!] (restricted)
  14. Ronald W. Jones, 1965. "The Structure of Simple General Equilibrium Models," Journal of Political Economy, University of Chicago Press, vol. 73, pages 557. [Downloadable!] (restricted)
  15. María del Carmen Marco Gil, 1993. "A Characterization Of The Extended Claim-Egalitarian Solution," Working Papers. Serie AD 1993-03, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
  16. Carmen Herrero Blanco & José Manuel Gutiérrez Díez, 1990. "Lagrangean Conditions For General Optimization Problems With Applications To Consumer Theory," Working Papers. Serie AD 1990-02, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
  17. Luis Corchón & Simon Wilkie, 1990. "Doubly Implementing The Ratio Correspondence With A "Natural" Mechanism," Working Papers. Serie AD 1990-03, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
  18. Dornbusch, Rudiger, 1983. "Real Interest Rates, Home Goods, and Optimal External Borrowing," Journal of Political Economy, University of Chicago Press, vol. 91(1), pages 141-53, February. [Downloadable!] (restricted)
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  19. Albert Ando, 1964. "An Empirical Model of United States Economic Growth: An Exploratory Study in Applied Capital Theory," NBER Chapters, in: Models of Income Determination, pages 327-380 National Bureau of Economic Research, Inc. [Downloadable!]
  20. Luis Corchón, 1990. "Monopolistic Competition: Equilibrium And Optimality," Working Papers. Serie AD 1990-05, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
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  21. Javier M. López Cuñat & José Angel Silva, 1991. "First-Best, Second-Best And Principal-Agent Problems," Working Papers. Serie AD 1991-02, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
  22. Luis Corchón, 1993. "Comparative Statics For Market Games: The Strong Concavity Case," Working Papers. Serie AD 1993-08, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
  23. Luis Corchón & Ignacio Ortuño Ortín, 1991. "Robust Implementation Under Alternative Information Structures," Working Papers. Serie AD 1991-12, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
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  24. Fernando Vega Redondo, 1991. "Technological Change And Market Structure: An Evolutionary Approach," Working Papers. Serie AD 1991-10, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
  25. Bean, Charles R, 1986. "The Terms of Trade, Labour Supply and the Current Account," Economic Journal, Royal Economic Society, vol. 96(380a), pages 38-46, Supplemen. [Downloadable!] (restricted)
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  26. Backus, David K., 1993. "Interpreting comovements in the trade balance and the terms of trade," Journal of International Economics, Elsevier, vol. 34(3-4), pages 375-387, May. [Downloadable!] (restricted)
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  27. Matsuyama, Kiminori, 1988. "Terms-of-Trade, Factor Intensities and the Current Account in a Life-Cycle Model," Review of Economic Studies, Blackwell Publishing, vol. 55(2), pages 247-62, April. [Downloadable!] (restricted)
  28. Svensson, Lars E O & Razin, Assaf, 1983. "The Terms of Trade and the Current Account: The Harberger-Laursen-Metzler Effect," Journal of Political Economy, University of Chicago Press, vol. 91(1), pages 97-125, February. [Downloadable!] (restricted)
  29. Amparo Urbano & María Dolores Alepuz Domenech, 1991. "Duopoly Experimentation: Cournot And Bertrand Competition," Working Papers. Serie AD 1991-07, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Luis Corchón & Andreu Mas-Colell, 1995. "A Note On Stability Of Best Reply And Gradient Systems With Applications To Imperfectly Competitive Models," Working Papers. Serie AD 1995-18, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
  2. José Alcalde, 1995. "Exchange-Proofness or Divorce-Proofness? Stability in One-Sided Matching Markets," Working Papers. Serie AD 1995-04, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
    Other versions:
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