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Dynamic analysis in the Viner model of mercantilism

  • Heng-Fu Zou

This paper models the central theme of mercantilism in Jacob Viner's interpretation-power vs plenty-in a framework of modern theory of international finance. It is shown that, in the Viner model of mercantilism, a nation with strong mercantilist sentiment ends up with large foreign asset accumulation and high consumption in the long run; an import tariff leads to more foreign asset holding and more total consumption; furthermore, in the Viner model, the Harberger-Laursen-Metzler effect exists unambiguously: a permanent terms-of-trade deterioration causes a current account deficit in the short run.

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Article provided by Elsevier in its journal Journal of International Money and Finance.

Volume (Year): 16 (1997)
Issue (Month): 4 (August)
Pages: 637-651

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Handle: RePEc:eee:jimfin:v:16:y:1997:i:4:p:637-651
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/30443

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