IDEAS home Printed from https://ideas.repec.org/h/spr/sprchp/978-3-540-78676-4_20.html
   My bibliography  Save this book chapter

Imported Inputs: Dynamic Effects on Economic Growth

In: International Trade and Economic Dynamics

Author

Listed:
  • Stefan F. Schubert

    (Free University of Bozen-Bolzano)

  • Stephen J. Turnovsky

    (University of Washington)

Abstract

This chapter studies the effects of an increase in the price of an intermediate input on economic growth of a small open economy. Most of the analysis employs a nonscale growth model, although for comparative purposes we also briefly consider a simple endogenous growth model. The economy has access to a perfect world capital market, a consequence of which is that the equilibrium growth rates of consumption and output can diverge indefinitely. Both models imply that following an oil shock consumption level, although its subsequent growth rate remains unaffected. But the two models yield sharply contrasting implications for the growth rate of capital and ouput. The nonscale growth model implies that the effects on the growth rate are only temporary. Eventually, the growth rate of capital and output recovers back to its initial balanced growth rate, although output, capital, and consumption are all permanently lower. In the case of the endogenous growth model, there are no transitional dynamics; a permanent increase in the price of the imported input leads to a permanent constant reduction in the growth rate of capital and output.

Suggested Citation

  • Stefan F. Schubert & Stephen J. Turnovsky, 2009. "Imported Inputs: Dynamic Effects on Economic Growth," Springer Books, in: Takashi Kamihigashi & Laixun Zhao (ed.), International Trade and Economic Dynamics, pages 257-279, Springer.
  • Handle: RePEc:spr:sprchp:978-3-540-78676-4_20
    DOI: 10.1007/978-3-540-78676-4_20
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    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:spr:sprchp:978-3-540-78676-4_20. 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: . General contact details of provider: http://www.springer.com .

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.