Financial Markets and Stochastic Growth
The authors study the effect of financial markets on the investment of a two-good two-country economy with stochastic production in a dynamic framework. Each country produces and invests only one good and, therefore, makes decisions as a central planner in an optimal growth model. Trade between consumers of both countries, however, takes place on competitive (spot or financial) markets. The authors compare the investment-consumption decisions of both "market" models with the benchmark case of an integrated world-equilibrium. In the log-linear case, it is possible to uniquely characterize the state-dependent preferences of consumers that lead to dynamically efficient investment decisions. It is shown that the investment decisions in both "market" models are, in general, inefficient compared with the efficient, or integrated world economy, case. Copyright Blackwell Publishing Ltd 2003..
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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 11 (2003)
Issue (Month): 2 (05)
|Contact details of provider:|| Web page: http://www.blackwellpublishing.com/journal.asp?ref=0965-7576|
|Order Information:||Web: http://www.blackwellpublishing.com/subs.asp?ref=0965-7576|
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.:
- Datta, Manjira & Mirman, Leonard J, 2000.
"Dynamic Externalities and Policy Coordination,"
Review of International Economics,
Wiley Blackwell, vol. 8(1), pages 44-59, February.
- Manjira Datta & Leonard J. Mirman, "undated". "Dynamic Externalities and Policy Coordination," Working Papers 97/11, Arizona State University, Department of Economics.
- Manjira Datta & Leonard Mirman, "undated". "Dynamic Externalities and Policy Coordination," Working Papers 2132841, Department of Economics, W. P. Carey School of Business, Arizona State University.
- Fischer, Ronald D. & Mirman, Leonard J., 1992. "Strategic dynamic interaction : Fish wars," Journal of Economic Dynamics and Control, Elsevier, vol. 16(2), pages 267-287, April.
- Brock, William A. & Mirman, Leonard J., 1972. "Optimal economic growth and uncertainty: The discounted case," Journal of Economic Theory, Elsevier, vol. 4(3), pages 479-513, June. Full references (including those not matched with items on IDEAS)