Trade in Goods and Trade in Assets
A two-good, two-country intertemporal general equilibrium model of pure exchange is presented, in which whatever causes intertemporal trade also causes intertemporal trade, so that simple textbook separability fails. The framework allows financial market phenomena such as international yield arbitrage, portfolio composition shifts, and capital-flow-financed current account deficits to interact dynamically with the real phenomena of pure exchange.
Volume (Year): 2 (2003)
Issue (Month): 2 (August)
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- Epstein, Larry G & Hynes, J Allan, 1983. "The Rate of Time Preference and Dynamic Economic Analysis," Journal of Political Economy, University of Chicago Press, vol. 91(4), pages 611-35, August.
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