Dynamic conditions for smooth convergence in the Ricardo–Mill model under commitment of trade and continuum of goods
AbstractUnder general conditions, it has been proved that free trade improves the welfare of open economies. However, the conditions to attain the free trade equilibrium are non trivial: when the productive process is planned, industries do not know the price that will prevail, while the production is not available in the world markets, generating a “general price uncertainty” due to the time–consuming nature of productive process. Consequently, additional assumptions is required to construct the time path driving economies from the autarky to the free trade. Thus, we assume commitment of trade and continuum of goods with the aim of handle with such a problems. This paper finds the general conditions for a smooth time path stable, monotonic and that guarantees a successful process of liberalization.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 52181.
Date of creation: 02 Dec 2013
Date of revision:
Ricardo–Mill model; general equilibria; dynamic models; dynamic welfare;
Find related papers by JEL classification:
- C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
- F15 - International Economics - - Trade - - - Economic Integration
- F22 - International Economics - - International Factor Movements and International Business - - - International Migration
- I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
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- Ruffin, Roy J., 1974. "International trade under uncertainty," Journal of International Economics, Elsevier, vol. 4(3), pages 243-259, August.
- Wilson, Charles A, 1980. "On the General Structure of Ricardian Models with a Continuum of Goods: Applications to Growth, Tariff Theory, and Technical Change," Econometrica, Econometric Society, vol. 48(7), pages 1675-1702, November.
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