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The Transfer Paradox In a Two-Sector Overlapping Generatoins Model: The Duality Approach

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  • Tsuyoshi Shinozaki

    (Nagoya University)

Abstract

In this paper, we apply the duality approach, which is generally used in a static framework, to a two-sector overlapping generations model. Applying the duality approach enables one to determine clearly the welfare effects of a transfer and to explain how the transfer paradox might occur. Especially, we showed that whether the transfer paradox occurs depends on two effects: the dynamic terms-of-trade effect and the capital accumulation effect.

Suggested Citation

  • Tsuyoshi Shinozaki, 2007. "The Transfer Paradox In a Two-Sector Overlapping Generatoins Model: The Duality Approach," Economics Bulletin, AccessEcon, vol. 6(10), pages 1-9.
    • Handle: RePEc:ebl:ecbull:eb-06f00007
    as

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    References listed on IDEAS

    as
    1. O. Galor & H. M. Polemarchakis, 1987. "Intertemporal Equilibrium and the Transfer Paradox," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 54(1), pages 147-156.
    2. Toshihiro Ihori, 1996. "Public Finance in an Overlapping Generations Economy," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-38990-8.
    3. Galor, Oded, 1992. "A Two-Sector Overlapping-Generations Model: A Global Characterization of the Dynamical System," Econometrica, Econometric Society, vol. 60(6), pages 1351-1386, November.
    4. Mitsuyoshi Yanagihara, 1998. "Public goods and the transfer paradox in an overlapping generations model," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 7(2), pages 175-205.
    5. Haaparanta, Pertti, 1989. "The intertemporal effects of international transfers," Journal of International Economics, Elsevier, vol. 26(3-4), pages 371-382, May.
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    JEL classification:

    • F0 - International Economics - - General
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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