Foreigh Asset Accumulation and Macroeconomic Policies
In this paper, we have studies the effects of macroeconomic policies on foreign asset accumulation in a wealth effect model used by Bardhan (1967), Kurz (1968), Calvo (1980) and Blanchard (1983). Our results differ dramatically from the ones in Obstfeld (1981). In particular, we have shown that government spending always reduces foreign asset accumulation (or increases foreign borrowing). While Obstfeld's model turned the conventional Mundell-Fleming model on its head, our wealth effect approach has restored its validity.
|Date of creation:||02 Jan 2012|
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- Robert J. Barro, 2003.
"Determinants of Economic Growth in a Panel of Countries,"
Annals of Economics and Finance,
Society for AEF, vol. 4(2), pages 231-274, November.
- Robert J. Barro, 2003. "Determinants of Economic Growth in a Panel of Countries," CEMA Working Papers 505, China Economics and Management Academy, Central University of Finance and Economics.
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