Autarkic Indeterminacy and Trade Determinacy
AbstractMost existing evidences for indeterminacy are obtained from analyzing models that do not consider trade. This paper considers an extension of Nishimura and Shimomura (Journal of Economic Theory, 2002) Heckscher-Ohlin framework by removing sector-specific externalities in one country while maintaining all other assumptions previously made by the authors. We show that even though indeterminacy arises under autarky, it can be eliminated when trade takes place with another country exhibiting saddle-path stability. Consequently, support for indeterminacy from calibrating an autarkic framework should be treated with some degree of caution.
Download InfoIf 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.
Bibliographic InfoPaper provided by National University of Singapore, Department of Economics in its series Departmental Working Papers with number wp0507.
Date of creation: Aug 2005
Date of revision:
Indeterminacy; Trade; Two-Country; Heckscher-Ohlin;
Other versions of this item:
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- F00 - International Economics - - General - - - General
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-09-13 (All new papers)
- NEP-INT-2005-09-20 (International Trade)
- NEP-MAC-2005-09-14 (Macroeconomics)
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.:
- Benhabib Jess & Farmer Roger E. A., 1994.
"Indeterminacy and Increasing Returns,"
Journal of Economic Theory,
Elsevier, vol. 63(1), pages 19-41, June.
- Benhabib, Jess & Farmer, Roger E. A., 1996.
"Indeterminacy and sector-specific externalities,"
Journal of Monetary Economics,
Elsevier, vol. 37(3), pages 421-443, June.
- Benhabib, Jess & Nishimura, Kazuo, 1998. "Indeterminacy and Sunspots with Constant Returns," Journal of Economic Theory, Elsevier, vol. 81(1), pages 58-96, July.
- 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.
- Nishimura, Kazuo & Shimomura, Koji, 2002. "Trade and Indeterminacy in a Dynamic General Equilibrium Model," Journal of Economic Theory, Elsevier, vol. 105(1), pages 244-260, July.
- Nishimura, Kazuo & Yano, Makoto, 1993. "Interlinkage in the Endogenous Real Business Cycles of International Economies," Economic Theory, Springer, vol. 3(1), pages 151-68, January.
- Kazuo Nishimura & Alain Venditti & Makoto Yano, 2006. "Endogenous Fluctuations In Two-Country Models," The Japanese Economic Review, Japanese Economic Association, vol. 57(4), pages 516-532.
- Jess Benhabib & Qinglai Meng & Kazuo Nishimura, 2000. "Indeterminacy under Constant Returns to Scale in Multisector Economies," Econometrica, Econometric Society, vol. 68(6), pages 1541-1548, November.
- Yunfang Hu & Kazuo Mino, 2013.
"Trade Structure and Belief-Driven Fluctuations in a Global Economy,"
KIER Working Papers
841, Kyoto University, Institute of Economic Research.
- Hu, Yunfang & Mino, Kazuo, 2013. "Trade structure and belief-driven fluctuations in a global economy," Journal of International Economics, Elsevier, vol. 90(2), pages 414-424.
- Yunfang Hu & Kazuo Mino, 2011. "Globalization and Volatility under Alternative Trade Structures," KIER Working Papers 791, Kyoto University, Institute of Economic Research.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.