IDEAS home Printed from https://ideas.repec.org/a/ier/iecrev/v30y1989i1p33-48.html
   My bibliography  Save this article

Monopoly Wealth and International Debt

Author

Listed:
  • Eaton, Jonathan

Abstract

Rents generated by long-lasting government policies may be capitalized as assets. With life-cycle saving behavior, these rents raise international indebtedness. Shifts in policy that affect their capitalized value generate correlated movements in the current account and the real exchange rate. Eliminating rent-creating policies imposes a capital loss born entirely by generations currently alive, while the benefit of removing a distortion is shared between those alive and unborn generations. Reform may therefore reduce the expected welfare of everyone alive. With monopoly in the provision of nontraded goods, there may be multiple Pareto-ranked equilibria. Copyright 1989 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Suggested Citation

  • Eaton, Jonathan, 1989. "Monopoly Wealth and International Debt," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 30(1), pages 33-48, February.
    • Handle: RePEc:ier:iecrev:v:30:y:1989:i:1:p:33-48
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0020-6598%28198902%2930%3A1%3C33%3AMWAID%3E2.0.CO%3B2-O&origin=repec
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Brock, William A & Magee, Stephen P, 1978. "The Economics of Special Interest Politics: The Case of the Tariff," American Economic Review, American Economic Association, vol. 68(2), pages 246-250, May.
    2. Bhagwati, Jagdish N, 1982. "Directly Unproductive, Profit-seeking (DUP) Activities," Journal of Political Economy, University of Chicago Press, vol. 90(5), pages 988-1002, October.
    3. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    4. Robert D. Tollison, 1982. "Rent Seeking: A Survey," Kyklos, Wiley Blackwell, vol. 35(4), pages 575-602, November.
    5. Menahem E. Yaari, 1965. "Uncertain Lifetime, Life Insurance, and the Theory of the Consumer," Review of Economic Studies, Oxford University Press, vol. 32(2), pages 137-150.
    6. Charles Engel & Kenneth Kletzer, 1988. "Tariffs and Saving in a Model with New Families," NBER Working Papers 2521, National Bureau of Economic Research, Inc.
    7. Frenkel, Jacob A & Razin, Assaf, 1986. "Fiscal Policies in the World Economy," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 564-594, June.
    8. Krueger, Anne O, 1974. "The Political Economy of the Rent-Seeking Society," American Economic Review, American Economic Association, vol. 64(3), pages 291-303, June.
    9. McCormick, Robert E & Shughart, William F, II & Tollison, Robert D, 1984. "The Disinterest in Deregulation," American Economic Review, American Economic Association, vol. 74(5), pages 1075-1079, December.
    10. Blanchard, Olivier J, 1985. "Debt, Deficits, and Finite Horizons," Journal of Political Economy, University of Chicago Press, vol. 93(2), pages 223-247, April.
    11. John Laitner, 1982. "Monopoly and Long-Run Capital Accumulation," Bell Journal of Economics, The RAND Corporation, vol. 13(1), pages 143-157, Spring.
    12. Ronald Findlay & Stanislaw Wellisz, 1982. "Endogenous Tariffs, the Political Economy of Trade Restrictions, and Welfare," NBER Chapters, in: Import Competition and Response, pages 223-244, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Keuschnigg, Christian & Kohler, Wilhelm, 1996. "Commercial policy and dynamic adjustment under monopolistic competition," Journal of International Economics, Elsevier, vol. 40(3-4), pages 373-409, May.
    2. Bertrand Crettez, 1999. "Concurrence à la Cournot, accumulation du capital et bulle," Annals of Economics and Statistics, GENES, issue 53, pages 69-91.
    3. repec:adr:anecst:y:1999:i:53:p:04 is not listed on IDEAS

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jagdish Bhagwati, 1989. "Is free trade passé after all?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 125(1), pages 17-44, March.
    2. Edward C. Prescott & Stephen L. Parente, 1999. "Monopoly Rights: A Barrier to Riches," American Economic Review, American Economic Association, vol. 89(5), pages 1216-1233, December.
    3. Alessandro Piergallini, 2006. "Real Balance Effects and Monetary Policy," Economic Inquiry, Western Economic Association International, vol. 44(3), pages 497-511, July.
    4. Panagariya, Arvind & Rodrik, Dani, 1993. "Political-Economy Arguments for a Uniform Tariff," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(3), pages 685-703, August.
    5. Amihai Glazer, 2008. "Crowding Out Wasteful Activities by Wasteful Activities," Working Papers 080908, University of California-Irvine, Department of Economics.
    6. Dennis Wesselbaum, 2020. "Procyclical Debt as Automatic Stabilizer," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 18(1), pages 81-102, March.
    7. Gehringer, Agnieszka & Prettner, Klaus, 2019. "Longevity And Technological Change," Macroeconomic Dynamics, Cambridge University Press, vol. 23(4), pages 1471-1503, June.
    8. Klaus Prettner & Timo Trimborn, 2017. "Demographic Change and R&D-based Economic Growth," Economica, London School of Economics and Political Science, vol. 84(336), pages 667-681, October.
    9. Martin Fukac & Adrian Pagan, 2009. "Structural Macro-Econometric Modelling in a Policy Environment," NCER Working Paper Series 50, National Centre for Econometric Research.
    10. Bruno S. Frey, "undated". "Knight Fever towards an Economics of Awards," IEW - Working Papers 239, Institute for Empirical Research in Economics - University of Zurich.
    11. Yuk Ying Chang & Martin Young, 2015. "Dissipative Competition: Evidence from a Quasi-Natural Experiment," International Review of Finance, International Review of Finance Ltd., vol. 15(2), pages 169-198, June.
    12. Willem H. Buiter, 2003. "Helicopter Money: Irredeemable Fiat Money and the Liquidity Trap," NBER Working Papers 10163, National Bureau of Economic Research, Inc.
    13. Theresa Grafeneder-Weissteiner & Klaus Prettner, 2009. "Agglomeration and population ageing in a two region model of exogenous growth," VID Working Papers 0901, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna.
    14. Coggins, Jay S., 1992. "Rent Dissipation and the Social Cost of Price Policy," Staff Papers 200551, University of Wisconsin-Madison, Department of Agricultural and Applied Economics.
    15. Koichi Fukumura & Kohei Nagamachi & Yasuhiro Sato & Kazuhiro Yamamoto, 2020. "Demographics, immigration, and market size," The Japanese Economic Review, Springer, vol. 71(4), pages 597-639, October.
    16. Ruppert, Kilian & Stähler, Nikolai, 2020. "Household savings, capital investments and public policies: What drives the German current account?," Discussion Papers 41/2020, Deutsche Bundesbank.
    17. Kuhn, Michael & Prettner, Klaus, 2016. "Growth and welfare effects of health care in knowledge-based economies," Journal of Health Economics, Elsevier, vol. 46(C), pages 100-119.
    18. Hassani Mahmooei, Behrooz & Parris, Brett, 2012. "Dynamics of effort allocation and evolution of trust: an agent-based model," MPRA Paper 44919, University Library of Munich, Germany.
    19. Mahmudul Anam & Eliakim Katz, 1988. "Rent-seeking and second best economics," Public Choice, Springer, vol. 59(3), pages 215-224, December.
    20. Schön, Matthias & Stähler, Nikolai, 2020. "When old meets young? Germany's population ageing and the current account," Economic Modelling, Elsevier, vol. 89(C), pages 315-336.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ier:iecrev:v:30:y:1989:i:1:p:33-48. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (). General contact details of provider: http://edirc.repec.org/data/deupaus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.