IDEAS home Printed from https://ideas.repec.org/p/fth/tilbur/9148.html
   My bibliography  Save this paper

Trade Reform, Policy Uncertainty and the Current Account : A Non-Expected Utility Approach

Author

Listed:
  • Van Wijnbergen, S.

Abstract

Rapid trade liberalization is often followed by a decline in private savings, although permanent changes in trade policy do not affect intertemporal prices and should thus leave private savings unaffected. But a positive probability of future policy reversal lowers the consumption rate of interest and thus will increase current consumption. Furthermore, to separate the impact of shifts in intertemporal relative prices and of risk aversion, we use the Ordinal Certainty Equivalence approach. We establish that trade policy uncertainty per se will further reduce savings if: (a) there is positive risk aversion; (b) the intertemporal substitution elasticity exceeds one.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Van Wijnbergen, S., 1991. "Trade Reform, Policy Uncertainty and the Current Account : A Non-Expected Utility Approach," Papers 9148, Tilburg - Center for Economic Research.
    • Handle: RePEc:fth:tilbur:9148
    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.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Nijman, T.E. & Palm, F.C., 1991. "Generalized least squares estimation of linear models containing rational future expectations," Other publications TiSEM 84eea9d9-bc3c-4d75-97d5-3, Tilburg University, School of Economics and Management.
    2. Talman, A.J.J., 1990. "General equilibrium programming," Other publications TiSEM b2dccd7c-f4e9-4e3c-9f67-f, Tilburg University, School of Economics and Management.
    3. Rodrik, D., 1990. "Trade Policies And Development: Some New Issues," Papers 181d, Harvard - J.F. Kennedy School of Government.
    4. Rudiger Dornbusch, 1991. "Credibility and Stabilization," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(3), pages 837-850.
    5. Diamond, Peter A. & Stiglitz, Joseph E., 1974. "Increases in risk and in risk aversion," Journal of Economic Theory, Elsevier, vol. 8(3), pages 337-360, July.
    6. Verbeek, Marno & Nijman, Theo, 1992. "Can Cohort Data Be Treated as Genuine Panel Data?," Empirical Economics, Springer, vol. 17(1), pages 9-23.
    7. Steel, Mark F. J. & Richard, Jean-Francois, 1991. "Bayesian multivariate exogeneity analysis : An application to a UK money demand equation," Journal of Econometrics, Elsevier, vol. 49(1-2), pages 239-274.
    8. Rankin, Neil, 1992. "Imperfect Competition, Expectations and the Multiple Effects of Monetary Growth," Economic Journal, Royal Economic Society, vol. 102(413), pages 743-753, July.
    9. Hall, Robert E, 1988. "Intertemporal Substitution in Consumption," Journal of Political Economy, University of Chicago Press, vol. 96(2), pages 339-357, April.
    10. Kapteyn, Arie & de Zeeuw, Aart, 1991. "Changing incentives for economic research in the Netherlands," European Economic Review, Elsevier, vol. 35(2-3), pages 603-611, April.
    11. Razin, Assaf & Svensson, Lars E. O., 1983. "Trade taxes and the current account," Economics Letters, Elsevier, vol. 13(1), pages 55-57.
    12. ten Raa, Thijs & van der Ploeg, Rick, 1989. "A statistical approach to the problem of negatives in input-output analysis," Economic Modelling, Elsevier, vol. 6(1), pages 2-19, January.
    13. Edwards, Sebastian & van Wijnbergen, Sweder, 1986. "The Welfare Effects of Trade and Capital Market Liberalization," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 27(1), pages 141-148, February.
    14. Nijman, Theo & Palm, Franz, 1991. "Generalized Least Squares Estimation of Linear Models Containing Rational Future Expectations," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(2), pages 383-389, May.
    15. Arrau, Patricio & van Wijnbergen, Sweder, 1991. "Intertemporal substitution, risk aversion, and private savings in Mexico," Policy Research Working Paper Series 682, The World Bank.
    16. van der Ploeg, F. & Markink, A.J., 1991. "Dynamic policy in linear models with rational expectations of future events : A computer package," Other publications TiSEM 3acd93c9-b28d-4acb-a750-c, Tilburg University, School of Economics and Management.
    17. van Groenendaal, Willem & de Zeeuw, Aart, 1991. "Control, coordination and conflict on international commodity markets," Economic Modelling, Elsevier, vol. 8(1), pages 90-101, January.
    18. Kapteyn, Arie & Kooreman, Peter, 1992. "Household labor supply: What kind of data can tell us how many decision makers there are?," European Economic Review, Elsevier, vol. 36(2-3), pages 365-371, April.
    19. Mr. Guillermo Calvo & Mr. Carlos A. Végh Gramont, 1990. "Credibility and the Dynamics of Stabilization Policy: A Basic Framework," IMF Working Papers 1990/110, International Monetary Fund.
    20. Selden, Larry, 1978. "A New Representation of Preferences over "Certain A Uncertain" Consumption Pairs: The "Ordinal Certainty Equivalent" Hypothesis," Econometrica, Econometric Society, vol. 46(5), pages 1045-1060, September.
    21. Verbeek, M.J.C.M. & Nijman, T.E., 1992. "Can cohort data be treated as genuine panel data?," Other publications TiSEM d4eada8f-b91c-4fe7-a58c-7, Tilburg University, School of Economics and Management.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Basu, Parantap & Ghosh, Satyajit & Kallianiotis, Ioannis, 2001. "Interest rate risk, labor supply and unemployment," Economic Modelling, Elsevier, vol. 18(2), pages 223-231, April.
    2. Basu, Parantap & Ghosh, Satyajit, 2001. "Tax rate uncertainty, labor supply and saving in a nonexpected utility maximizing model," The Quarterly Review of Economics and Finance, Elsevier, vol. 41(1), pages 49-68.
    3. Guillermo A. Calvo & Enrique G. Mendoza, 1994. "Trade Reforms of Uncertain Duration and Real Uncertainty: A First Approximation," IMF Staff Papers, Palgrave Macmillan, vol. 41(4), pages 555-586, December.
    4. Wilko Bolt & Kostas Mavromatis & Sweder van Wijnbergen, "undated". "The Global Macroeconomics of a Trade War: The EAGLE model on the US-China trade conflict," Tinbergen Institute Discussion Papers 19-015/VIII, Tinbergen Institute.
    5. Eijffinger, S.C.W., 1993. "Central bank independence in twelve industrial countries," Other publications TiSEM 0401b17a-e2c7-4179-ace9-a, Tilburg University, School of Economics and Management.
    6. Muto, S., 1994. "On licensing policies in Bertrand competition," Other publications TiSEM ef5dd5db-f744-4695-b669-3, Tilburg University, School of Economics and Management.
    7. Yago, Milton & Morgan, Wyn, 2008. "The impact of policy reversal on economic performance in Sub-Saharan Africa," European Journal of Political Economy, Elsevier, vol. 24(1), pages 88-106, March.
    8. Wilko Bolt & Kostas Mavromatis & Sweder van Wijnbergen, "undated". "The Global Macroeconomics of a Trade War: The EAGLE model on the US-China trade conflict," Tinbergen Institute Discussion Papers 19-015/VIII, Tinbergen Institute.
    9. Basu, Parantap, 1995. "Tax rate uncertainty and the sensitivity of consumption to income in an overlapping generations model," Journal of Economic Dynamics and Control, Elsevier, vol. 19(1-2), pages 421-439.

    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. Kapteyn, Arie & Kooreman, Peter, 1992. "Household labor supply: What kind of data can tell us how many decision makers there are?," European Economic Review, Elsevier, vol. 36(2-3), pages 365-371, April.
    2. Van Soest, Arthur & Kooreman, Peter, 1990. "Coherency of the indirect translog demand system with binding nonnegativity constraints," Journal of Econometrics, Elsevier, vol. 44(3), pages 391-400, June.
    3. Nijman, T.E. & Verbeek, M.J.C.M., 1993. "Nonresponse in panel data : The impact on estimates of a life cycle consumption function," Other publications TiSEM 7e304903-485c-4f36-b13a-f, Tilburg University, School of Economics and Management.
    4. Kapteyn, Arie & Kooreman, Peter & van Soest, Arthur, 1990. "Quantity Rationing and Concavity in a Flexible Household Labor Supply Model," The Review of Economics and Statistics, MIT Press, vol. 72(1), pages 55-62, February.
    5. Bomze, I.M. & Van Damme, E.E.C., 1990. "A Dynamical Characterization Of Evolutionarity Stable States," Papers 9045, Tilburg - Center for Economic Research.
    6. Borm, Peter & Keiding, H & McLean, R.P. & Oortwijn, S & Tijs, S, 1992. "The Compromise Value for NTU-Games," International Journal of Game Theory, Springer;Game Theory Society, vol. 21(2), pages 175-189.
    7. Lemmen, J.J.G. & Eijffinger, S.C.W., 1992. "The degree of financial integration in the European Community," Research Memorandum FEW 540, Tilburg University, School of Economics and Management.
    8. Barten, A.P., 1992. "The estimation of mixed demand systems," Other publications TiSEM 182f4296-e95b-4dea-aa8b-d, Tilburg University, School of Economics and Management.
    9. Zou, L., 1993. "Ownership structure and efficiency : An incentive mechanism approach," Other publications TiSEM a72a05c2-b3f2-47c7-a003-f, Tilburg University, School of Economics and Management.
    10. Greenberg, J., 1993. "On the sensitivity of von Neuman and Morgenstern abstract stable sets : The stable and the individual stable bargaining set," Other publications TiSEM f8331cc7-3adf-4583-8921-0, Tilburg University, School of Economics and Management.
    11. Antonio Cutanda & José M. Labeaga & Juan A. Sanchis-Llopis, 2020. "Aggregation biases in empirical Euler consumption equations: evidence from Spanish data," Empirical Economics, Springer, vol. 58(3), pages 957-977, March.
    12. Benjamin Eden, 2004. "Substitution and Risk Aversion: Is Risk Aversion Important for Understanding Asset Prices?," Vanderbilt University Department of Economics Working Papers 0422, Vanderbilt University Department of Economics.
    13. Verbeek, M.J.C.M. & Nijman, T.E., 1993. "Testing for selectivity bias in panel data models," Other publications TiSEM 45c3a75b-eb19-456f-ba92-a, Tilburg University, School of Economics and Management.
    14. Bussolo,Maurizio & Ezebuihe,Jessy Amarachi & Munoz Boudet,Ana Maria & Poupakis,Stavros & Rahman,Tasmia & Sarma,Nayantara, 2022. "Social Norms and Gender Equality : A Descriptive Analysis for South Asia," Policy Research Working Paper Series 10142, The World Bank.
    15. Kasraian, Dena & Maat, Kees & van Wee, Bert, 2018. "Urban developments and daily travel distances: Fixed, random and hybrid effects models using a Dutch pseudo-panel over three decades," Journal of Transport Geography, Elsevier, vol. 72(C), pages 228-236.
    16. Verbeek, Marno & Vella, Francis, 2005. "Estimating dynamic models from repeated cross-sections," Journal of Econometrics, Elsevier, vol. 127(1), pages 83-102, July.
    17. Syed M. Ahsan & Panagiotis Tsigaris, 2009. "The Efficiency Loss of Capital Income Taxation under Imperfect Loss Offset Provisions," Public Finance Review, , vol. 37(6), pages 710-731, November.
    18. Katsushi S. Imai & Takahiro Sato, 2014. "Recent Changes in Micro-Level Determinants of Fertility in India: Evidence from National Family Health Survey Data," Oxford Development Studies, Taylor & Francis Journals, vol. 42(1), pages 65-85, March.
    19. repec:hal:wpspec:info:hdl:2441/8703 is not listed on IDEAS
    20. Sarah Bridges & Simona Mateut, 2009. "Attitudes towards immigration in Europe," Working Papers 2009008, The University of Sheffield, Department of Economics, revised May 2009.
    21. Strijbosch, L.W.G. & Heuts, R.M.J., 1994. "Investigating several alternatives for estimating the lead time demand distribution in a continuous review inventory model," Other publications TiSEM dc1f886c-0122-4da9-9598-8, Tilburg University, School of Economics and Management.

    More about this item

    Keywords

    international trade ; trade barriers;

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

    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:fth:tilbur:9148. 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: Thomas Krichel (email available below). General contact details of provider: https://edirc.repec.org/data/cekubnl.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.