IDEAS home Printed from
   My bibliography  Save this article

The Dynamics of a Small Open Economy in a Ricardian Model with a Market for Land under Equilibrium Expectations


  • Carlo BERETTA

    (Universita' Cattolica di Milano)


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.

Suggested Citation

  • Carlo BERETTA, 2007. "The Dynamics of a Small Open Economy in a Ricardian Model with a Market for Land under Equilibrium Expectations," Rivista Internazionale di Scienze Sociali, Vita e Pensiero, Pubblicazioni dell'Universita' Cattolica del Sacro Cuore, vol. 115(1), pages 29-47.
  • Handle: RePEc:vep:journl:y:2007:v:115:i:1:p:29-47

    Download full text from publisher

    File URL:
    Download Restriction: Yes

    More about this item


    Dynamic of a Small Open Economy; Market for land in a Ricardian model; Factor movements in a model of trade;

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity


    Access and download statistics


    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: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). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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.