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Autarkic Indeterminacy and Trade Determinacy

Author

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  • Nicholas C.S. Sim

    (Department of Economics, Boston College, USA)

  • Kong-Weng Ho

    (Division of Economics,School of Humanities and Social Sciences, Nanyang Technological University, Singapore)

Abstract

We extend the model of Nishimura and Shimomura (2002) to consider a two-country framework where under autarky indeterminacy arises in one country but determinacy in the other, and show that indeterminacy could be eliminated when trade takes place between the two.

Suggested Citation

  • Nicholas C.S. Sim & Kong-Weng Ho, 2007. "Autarkic Indeterminacy and Trade Determinacy," Economic Growth Centre Working Paper Series 0706, Nanyang Technological University, School of Social Sciences, Economic Growth Centre.
  • Handle: RePEc:nan:wpaper:0706
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    References listed on IDEAS

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    1. Benhabib Jess & Farmer Roger E. A., 1994. "Indeterminacy and Increasing Returns," Journal of Economic Theory, Elsevier, vol. 63(1), pages 19-41, June.
    2. Benhabib, Jess & Farmer, Roger E. A., 1996. "Indeterminacy and sector-specific externalities," Journal of Monetary Economics, Elsevier, vol. 37(3), pages 421-443, June.
    3. Jess Benhabib & Qinglai Meng & Kazuo Nishimura, 2000. "Indeterminacy under Constant Returns to Scale in Multisector Economies," Econometrica, Econometric Society, vol. 68(6), pages 1541-1548, November.
    4. Nishimura, Kazuo & Shimomura, Koji, 2002. "Trade and Indeterminacy in a Dynamic General Equilibrium Model," Journal of Economic Theory, Elsevier, vol. 105(1), pages 244-260, July.
    5. Kazuo Nishimura & Alain Venditti & Makoto Yano, 2006. "Endogenous Fluctuations In Two-Country Models," The Japanese Economic Review, Japanese Economic Association, vol. 57(4), pages 516-532.
    6. Benhabib, Jess & Nishimura, Kazuo, 1998. "Indeterminacy and Sunspots with Constant Returns," Journal of Economic Theory, Elsevier, vol. 81(1), pages 58-96, July.
    7. Nishimura, Kazuo & Yano, Makoto, 1993. "Interlinkage in the Endogenous Real Business Cycles of International Economies," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 3(1), pages 151-168, January.
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    Citations

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    Cited by:

    1. Antoine Le Riche, 2016. "Macroeconomic Volatility and Trade in OLG Economies," Working Papers halshs-01079773, HAL.
    2. repec:bla:ijethy:v:13:y:2017:i:4:p:401-425 is not listed on IDEAS
    3. Antoine Le Riche, 2014. "Macroeconomic Volatility and Trade in OLG Economies," AMSE Working Papers 1446, Aix-Marseille School of Economics, Marseille, France, revised Nov 2014.
    4. Kazuo Nishimura & Alain Venditti & Makoto Yano, 2010. "Expectation-driven fluctuations and welfare loss under free trade in two-country models," International Journal of Economic Theory, The International Society for Economic Theory, vol. 6(1), pages 97-125.
    5. Hu, Yunfang & Mino, Kazuo, 2013. "Trade structure and belief-driven fluctuations in a global economy," Journal of International Economics, Elsevier, vol. 90(2), pages 414-424.
    6. Yunfang Hu & Kazuo Mino, 2011. "Globalization and Volatility under Alternative Trade Structures," KIER Working Papers 791, Kyoto University, Institute of Economic Research.

    More about this item

    Keywords

    Indeterminacy; Trade; Two-Country Framework.;

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F00 - International Economics - - General - - - General
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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