The Dynamics of a Small Open Economy in a Ricardian Model with a Market for Land under Equilibrium Expectations
Each country produces just one good, corn, by means of corn, labour and land. Capitalists allocate their funds between corn production and the purchase of land so as to equalise the rate of profit on these activities under equilibrium expectations. Autarky in natural equilibrium is briefly discussed. Opening the economy allows capitalists to invest either domestically or abroad. In the small country case, equilibrium expectations make the economy very unstable. Under most circumstances, the economy will register an inflow of capital, which can be employed productively only in the short run, if at all, and thereafter will translate in speculation in land, followed by a balance of payments crisis and collapse on this market.
Volume (Year): 115 (2007)
Issue (Month): 1 ()
|Contact details of provider:|| |
When requesting a correction, please mention this item's handle: RePEc:vep:journl:y:2007:v:115:i:1:p:29-47. 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: (Vep - Vita e Pensiero)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 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.