IDEAS home Printed from https://ideas.repec.org/p/ags/widerw/295558.html
   My bibliography  Save this paper

The Intertemporal Effects of International Transfers

Author

Listed:
  • Haaparanta, Pertti

Abstract

The classical transfer problem is studied in an overlapping generations framework, where the transfer is from a creditor country to a debtor country. A distinction is made between tax-financed and debt-financed transfers on the one hand, and between the uses of the transfer on the other hand. The transfer can be used to increase private income or to reduce government debt. It is first shown that the transfer can make the welfare change in the same direction in both of the countries, and that this possibility cannot be ruled out by stability condition. It is also shown that for all transfers the short run and the long run welfare effects; may be qualitatively different. The only form of transfer that in the long run surely increases welfare in the country receiving the transfer is the tax-financed debt-relief. But in the short run it will reduce the welfare in all countries. There exists thus a trade-off between short and long run welfare, since all other forms of transfers guarantee a short run welfare improvement for the receiving country.

Suggested Citation

  • Haaparanta, Pertti, "undated". "The Intertemporal Effects of International Transfers," WIDER Working Papers 295558, United Nations University, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:ags:widerw:295558
    DOI: 10.22004/ag.econ.295558
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/295558/files/WP3.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.295558?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Barro, Robert J, 1974. "Are Government Bonds Net Wealth?," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1095-1117, Nov.-Dec..
    2. Buiter, Willem H, 1981. "Time Preference and International Lending and Borrowing in an Overlapping-Generations Model," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 769-797, August.
    3. Persson, Torsten, 1985. "Deficits and intergenerational welfare in open economies," Journal of International Economics, Elsevier, vol. 19(1-2), pages 67-84, August.
    Full references (including those not matched with items 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. Obstfeld, Maurice, 1989. "Fiscal deficits and relative prices in a growing world economy," Journal of Monetary Economics, Elsevier, vol. 23(3), pages 461-484, May.
    2. Pertti Haaparanta, 1986. "The Intertemporal Effects of International Transfers," WIDER Working Paper Series wp-1986-003, World Institute for Development Economic Research (UNU-WIDER).
    3. Haaparanta, Pertti, 1989. "The intertemporal effects of international transfers," Journal of International Economics, Elsevier, vol. 26(3-4), pages 371-382, May.
    4. Steigum, Erling Jr. & Thogersen, Oystein, 1995. "Petroleum wealth, debt policy, and intergenerational welfare: The case of Norway," Journal of Policy Modeling, Elsevier, vol. 17(4), pages 427-442, August.
    5. Partha Sen, 2005. "Debt Policy in a Competitive Two-Sector Overlapping Generations Model," Working papers 137, Centre for Development Economics, Delhi School of Economics.
    6. Vansteenkiste, Isabel & Nickel, Christiane, 2008. "Fiscal policies, the current account and Ricardian equivalence," Working Paper Series 935, European Central Bank.
    7. Yvonne Adema & Lex Meijdam & Harrie Verbon, 2009. "The international spillover effects of pension reform," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 16(5), pages 670-696, October.
    8. Persson, Torsten & Svensson, Lars E O, 1985. "Current Account Dynamics and the Terms of Trade: Harberger-Laursen-Metzler Two Generations Later," Journal of Political Economy, University of Chicago Press, vol. 93(1), pages 43-65, February.
    9. Kim‐Heng Tan, 1995. "The Intergenerational Incidence of Government Spending," The Economic Record, The Economic Society of Australia, vol. 71(1), pages 54-65, March.
    10. Aglietta, Michel & Chateau, Jean & Fayolle, Jacky & Juillard, Michel & Le Cacheux, Jacques & Le Garrec, Gilles & Touze, Vincent, 2007. "Pension reforms in Europe: An investigation with a computable OLG world model," Economic Modelling, Elsevier, vol. 24(3), pages 481-505, May.
    11. David Burgess, 2006. "Public Investment Criteria in Overlapping Generations Models of Open Economies," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 13(1), pages 59-78, January.
    12. Obstfeld, Maurice & Rogoff, Kenneth, 1995. "The intertemporal approach to the current account," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 34, pages 1731-1799, Elsevier.
    13. Carol L. Osler, 1987. "Factor Prices and Welfare Under Integrated Capital Markets," NBER Working Papers 2447, National Bureau of Economic Research, Inc.
    14. Vidal, Jean-Pierre, 2000. "Capital Mobility in a Dynastic Framework," Oxford Economic Papers, Oxford University Press, vol. 52(3), pages 606-625, July.
    15. Casarico Alessandra, 2001. "Pension systems in integrated capital markets," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 1(1), pages 1-19, November.
    16. Vidal, J.-P., 1999. "Capital Mobility in a Dynastic Framework," G.R.E.Q.A.M. 99a21, Universite Aix-Marseille III.
    17. Jacques Le Cacheux & Christian Vasseur, 1985. "Endettement extérieur et politique économique," Revue de l'OFCE, Programme National Persée, vol. 13(1), pages 149-184.
    18. Jorge Ramos & Hernán Rincón, 2000. "El Balance Fisacl y el Balance en la Cuenta Corriente en Colombia: Canales de Transmisión y Causalidad," Borradores de Economia 166, Banco de la Republica de Colombia.
    19. Shuanglin Lin & Wei Zhang, 1998. "Welfare Effects of Capital Taxation in a Small Open Economy," Open Economies Review, Springer, vol. 9(1), pages 5-20, January.
    20. Sheinin, Yacov, 1985. "External Debt and Capital Accumulation in a Small Open Economy," Foerder Institute for Economic Research Working Papers 275391, Tel-Aviv University > Foerder Institute for Economic Research.

    More about this item

    Keywords

    International Development;

    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:ags:widerw:295558. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/widerfi.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.