Accumulation and Growth in a Two-Country Model: A Simulation Approach
This paper analyzes saving and capital accumulation in a two-good growth model of two market economies in which economic agents optimize with perfect foresight. The goal is to present a model in which short-run dynamics and the steady-state are soundly integrated. We stress the importance of asset markets as the linkage that transmits disturbances both internationally and intertemporally. While many components of the model described below can be found in the literature on optimal consumption, investment and international growth models, we provide a consistent synthesis. Our framework permits the analysis of structural adjustment in the global economy, and the dynamic effects of a wide range of public policies.
|Date of creation:||Oct 1980|
|Publication status:||published as with D. Lipton, Journal of International Economics, 15(1/2), 135-159 August 1983|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
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- Buiter, Willem H, 1981.
"Time Preference and International Lending and Borrowing in an Overlapping-Generations Model,"
Journal of Political Economy,
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- Jeffrey D. Sachs, 1980. "Energy and Growth under Flexible Exchange Rates: A Simulation Study," NBER Working Papers 0582, National Bureau of Economic Research, Inc.
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- Robert E. Lucas & Jr., 1967. "Adjustment Costs and the Theory of Supply," Journal of Political Economy, University of Chicago Press, vol. 75, pages 321-321. Full references (including those not matched with items on IDEAS)