Advanced Search
MyIDEAS: Login to save this paper or follow this series

Wealth Accumulation and Growth in a Specific-Factors Model of Trade and Finance

Contents:

Author Info

  • Petrucci, Alberto

    ()

Abstract

This paper investigates the allocative properties of an OLG specificfactors small open economy facing perfect capital mobility. Wealth formation, economic development and different labor market regimes are at the center-stage of the analysis. In a model with competitive wages and no unemployment, we find that exogenous shocks that do not affect human wealth —like the terms of trade and land endowment shifts— or the propensity to save, leave nonhuman wealth, consumption and aggregate labor unchanged; in such cases, capital formation is driven by the static effects exerted on sectoral labor. Disturbances that alter human wealth —like the world interest rate, and capital and labor taxation shocks— or the thrift rate, instead, affect nonhuman wealth and consumption as they involve an intergenerational redistribution of resources that modifies aggregate saving; labor hours supplied may be changed. In these circumstances, capital accumulation is the result of the consequences exerted on financial wealth and input demands. The consideration of a labor market with structural unemployment does not qualitatively affect the results, except for the world interest rate and the rate of time discount shifts. Our results differ substantially from those obtained in static and dynamic specific-factors setups with financial autharky.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://web.unimol.it/progetti/repec/mol/ecsdps/ESDP06029.pdf
Download Restriction: no

Bibliographic Info

Paper provided by University of Molise, Dept. EGSeI in its series Economics & Statistics Discussion Papers with number esdp06029.

as in new window
Length: 33 pages
Date of creation: 16 Jun 2006
Date of revision:
Handle: RePEc:mol:ecsdps:esdp06029

Contact details of provider:
Postal: Via De Sanctis, 86100 Campobasso
Fax: +39-0874311124
Web page: http://www.unimol.it
More information through EDIRC

Related research

Keywords: Specific-Factors; Capital Accumulation; Land; Net Foreign Assets; Finite Horizons.;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

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.:
as in new window
  1. Solow, Robert M., 1979. "Another possible source of wage stickiness," Journal of Macroeconomics, Elsevier, Elsevier, vol. 1(1), pages 79-82.
  2. Petrucci, Alberto, 2006. "The incidence of a tax on pure rent in a small open economy," Journal of Public Economics, Elsevier, Elsevier, vol. 90(4-5), pages 921-933, May.
  3. Hiau Looi Kee & Hian Teck Hoon, 2004. "Trade, Capital Accumulation and Structural Unemployment: An Empirical Study of the Singapore Economy," Working Papers, Singapore Management University, School of Economics 06-2004, Singapore Management University, School of Economics, revised Mar 2004.
  4. Blanchard, Olivier J, 1985. "Debt, Deficits, and Finite Horizons," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 93(2), pages 223-47, April.
  5. Jonathan Eaton, 1987. "A Dynamic Specific-Factors Model of International Trade," NBER Working Papers 1479, National Bureau of Economic Research, Inc.
  6. Mahbub Morshed, A. K. M. & Turnovsky, Stephen J., 2004. "Sectoral adjustment costs and real exchange rate dynamics in a two-sector dependent economy," Journal of International Economics, Elsevier, Elsevier, vol. 63(1), pages 147-177, May.
  7. Petrucci, Alberto & Phelps, Edmund S, 2005. "Capital Subsidies versus Labor Subsidies: A Trade-Off between Capital and Employment?," Journal of Money, Credit and Banking, Blackwell Publishing, Blackwell Publishing, vol. 37(5), pages 907-22, October.
  8. Calvo, Guillermo, 1979. "Quasi-Walrasian Theories of Unemployment," American Economic Review, American Economic Association, American Economic Association, vol. 69(2), pages 102-07, May.
  9. Roldos, Jorge E, 1991. "Tariffs, Investment and the Current Account," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(1), pages 175-94, February.
  10. Kose, M. Ayhan, 2002. "Explaining business cycles in small open economies: 'How much do world prices matter?'," Journal of International Economics, Elsevier, Elsevier, vol. 56(2), pages 299-327, March.
  11. Jonathan Eaton, 1984. "Foreign-Owned Land," NBER Working Papers 1512, National Bureau of Economic Research, Inc.
  12. Mussa, Michael, 1974. "Tariffs and the Distribution of Income: The Importance of Factor Specificity, Substitutability, and Intensity in the Short and Long Run," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 82(6), pages 1191-1203, Nov.-Dec..
  13. Søren Bo Nielsen & Peter Birch Sørensen, 1989. "Capital Income Taxation in a Growing Open Economy," Discussion Papers, University of Copenhagen. Department of Economics 89-14, University of Copenhagen. Department of Economics.
  14. Brock, Philip L & Turnovsky, Stephen J, 1993. "The Growth and Welfare Consequences of Differential Tariffs," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(4), pages 765-94, November.
  15. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, American Economic Association, vol. 74(3), pages 433-44, June.
  16. Feldstein, Martin S, 1977. "The Surprising Incidence of a Tax on Pure Rent: A New Answer to an Old Question," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 85(2), pages 349-60, April.
  17. Salop, Steven C, 1979. "A Model of the Natural Rate of Unemployment," American Economic Review, American Economic Association, American Economic Association, vol. 69(1), pages 117-25, March.
  18. repec:fth:coluec:521 is not listed on IDEAS
  19. Ryder, Harl E, Jr, 1969. "Optimal Accumulation in a Two-Sector Neoclassical Economy with Non-Shiftable Capital," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 77(4), pages 665-83, Part II, .
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:mol:ecsdps:esdp06029. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Claudio Lupi).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.