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A Dynamic Chamberlin-Heckscher-Ohlin Model with Endogenous Time Preferences: A Note

Author

Listed:
  • Iwasa, Kazumichi
  • Kikuchi, Toru
  • Shimomura, Koji

Abstract

This note formulates a dynamic two-country (developed and developing countries) Chamberlin-Heckscher-Ohlin model of trade with endogenous time preferences a la Uzawa (1968). We examine the relationship between initial factor endowment differences and trade patterns in the steady state. In particular, to highlight the integration of developing countries (e.g., China) into the world trading system, we concentrate on the case of asymmetric size of two countries (in terms of population). It will be shown that (i) given that the representative household in each country supplies an equal amount of labor, only intra-industry trade occurs in the steady state irrespective of differences in the number of representative households and that (ii) the number of households being equal, the country with less labor efficiency becomes the net exporter of the capital-intensive good.

Suggested Citation

  • Iwasa, Kazumichi & Kikuchi, Toru & Shimomura, Koji, 2007. "A Dynamic Chamberlin-Heckscher-Ohlin Model with Endogenous Time Preferences: A Note," MPRA Paper 4981, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:4981
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    File URL: https://mpra.ub.uni-muenchen.de/4981/1/MPRA_paper_4981.pdf
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    References listed on IDEAS

    as
    1. Zhiqi Chen, 1992. "Long-Run Equilibria in a Dynamic Heckscher-Ohlin Model," Canadian Journal of Economics, Canadian Economics Association, vol. 25(4), pages 923-943, November.
    2. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    3. Andrew Atkeson & Patrick J. Kehoe, 2000. "Paths of development for early- and late-bloomers in a dynamic Heckscher-Ohlin model," Staff Report 256, Federal Reserve Bank of Minneapolis.
    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. Jaume Ventura, 1997. "Growth and Interdependence," The Quarterly Journal of Economics, Oxford University Press, vol. 112(1), pages 57-84.
    6. Toru Kikuchi & Koji Shimomura, 2007. "A New Dynamic Trade Model of Increasing Returns and Monopolistic Competition," Review of Development Economics, Wiley Blackwell, vol. 11(2), pages 232-241, May.
    7. H. Oniki & H. Uzawa, 1965. "Patterns of Trade and Investment in a Dynamic Model of International Trade," Review of Economic Studies, Oxford University Press, vol. 32(1), pages 15-37.
    8. Stiglitz, Joseph E, 1970. "Factor Price Equalization in a Dynamic Economy," Journal of Political Economy, University of Chicago Press, vol. 78(3), pages 456-488, May-June.
    9. Hong, Wontack, 1988. "Time Preference in Dynamic Trade Models: An Empirical Critique," Economic Development and Cultural Change, University of Chicago Press, vol. 36(4), pages 741-751, July.
    10. Lawrance, Emily C, 1991. "Poverty and the Rate of Time Preference: Evidence from Panel Data," Journal of Political Economy, University of Chicago Press, vol. 99(1), pages 54-77, February.
    11. Ogawa, Kazuo, 1993. "Economic development and time preference schedule : The case of Japan and East Asian NICs," Journal of Development Economics, Elsevier, vol. 42(1), pages 175-195, October.
    12. Kazuo Nishimura & Koji Shimomura, 2006. "Indeterminacy in a dynamic two-country model," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 29(2), pages 307-324, October.
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    More about this item

    Keywords

    trade patterns; dynamic trade model; endogenous time preferences;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

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