Demographics in Dynamic Heckscher-Ohlin Models: Overlapping Generations versus Infinitely Lived Consumers
This paper contrasts the properties of dynamic Heckscher-Ohlin models with overlapping generations with those of models with infinitely lived consumers. In both environments, if capital is mobile across countries, factor price equalization occurs after the initial period. In general, however, the properties of equilibria differ drastically across environments: With infinitely lived consumers, we find that factor prices equalize in any steady state or cycle and that, in general, there is positive trade in any steady state or cycle. With overlapping generations, in contrast, we construct examples with steady states and cycles in which factor prices are not equalized, and we find that any equilibrium that converges to a steady state or cycle with factor price equalization has no trade after a finite number of periods.
|Date of creation:||2010|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.EconomicDynamics.org/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bianconi, Marcelo, 1995. "On dynamic real trade models," Economics Letters, Elsevier, vol. 47(1), pages 47-52, January.
- Baxter, Marianne, 1992.
"Fiscal Policy, Specialization, and Trade in the Two-Sector Model: The Return of Ricardo?,"
Journal of Political Economy,
University of Chicago Press, vol. 100(4), pages 713-44, August.
- Marianne Baxter, 1991. "Fiscal policy, specialization, and trade in the two-sector model: the return of Ricardo?," Discussion Paper / Institute for Empirical Macroeconomics 56, Federal Reserve Bank of Minneapolis.
- Kemp, Murray C & Wong, Kar-yiu, 1995.
"Gains from Trade with Overlapping Generations,"
Springer, vol. 6(2), pages 283-303, July.
- Kemp, M.C. & Wong, K.Y., 1992. "Gains from Trade with Overlapping Generations," Working Papers 92-06, University of Washington, Department of Economics.
- Kemp, M.C. & Wong, K.Y., 1992. "Gains from Trade with Overlapping Generations," Discussion Papers in Economics at the University of Washington 92-06, Department of Economics at the University of Washington.
- Sayan, Serdar, 2005. "Heckscher-Ohlin revisited: implications of differential population dynamics for trade within an overlapping generations framework," Journal of Economic Dynamics and Control, Elsevier, vol. 29(9), pages 1471-1493, September.
- Pablo Serra, 1991. "Short-run and Long-run Welfare Implications of Free Trade," Canadian Journal of Economics, Canadian Economics Association, vol. 24(1), pages 21-33, February.
- Claustre Bajona & Timothy J. Kehoe, 2008.
"Trade, growth, and convergence in a dynamic Heckscher-Ohlin model,"
378, Federal Reserve Bank of Minneapolis.
- Claustre Bajona & Timothy Kehoe, 2010. "Trade, Growth, and Convergence in a Dynamic Heckscher-Ohlin Model," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(3), pages 487-513, July.
- Claustre Bajona & Timothy J. Kehoe, 2006. "Trade, Growth, and Convergence in a Dynamic Heckscher-Ohlin Model," NBER Working Papers 12567, National Bureau of Economic Research, Inc.
- Markusen, James R., 1983. "Factor movements and commodity trade as complements," Journal of International Economics, Elsevier, vol. 14(3-4), pages 341-356, May.
- Larry E. Jones & Rodolfo E. Manuelli, 1990.
"Finite Lifetimes and Growth,"
NBER Working Papers
3469, National Bureau of Economic Research, Inc.
- Partha Chatterjee & Malik Shukayev, 2006. "Convergence in a Stochastic Dynamic Heckscher-Ohlin Model," Staff Working Papers 06-23, Bank of Canada.
- T. J. Kehoe & D. K. Levine, 1982.
"Comparative Statics and Perfect Foresight in Infinite Horizon Economies,"
312, Massachusetts Institute of Technology (MIT), Department of Economics.
- Kehoe, Timothy J & Levine, David K, 1985. "Comparative Statics and Perfect Foresight in Infinite Horizon Economies," Econometrica, Econometric Society, vol. 53(2), pages 433-53, March.
- Timothy J Kehoe & David K Levine, 1985. "Comparative Statics and Perfect Foresight in Infinite Horizon Economies," Levine's Working Paper Archive 1873, David K. Levine.
- Timothy J. Kehoe & David K. Levine, 1982. "Comparitive Statics and Perfect Foresight in Infinite Horizon Economies," UCLA Economics Working Papers 259, UCLA Department of Economics.
- Gokcekus, Omer & Tower, Edward, 1996.
"Does Trade Liberalization Benefit Young and Old Alike?,"
96-35, Duke University, Department of Economics.
- Gokcekus, Omer & Tower, Edward, 1998. "Does Trade Liberalization Benefit Young and Old Alike?," Review of International Economics, Wiley Blackwell, vol. 6(1), pages 50-58, February.
- Boldrin, Michele & Montrucchio, Luigi, 1986. "On the indeterminacy of capital accumulation paths," Journal of Economic Theory, Elsevier, vol. 40(1), pages 26-39, October.
- Fisher, Eric ON., 1992. "Sustained growth in the model of overlapping generations," Journal of Economic Theory, Elsevier, vol. 58(1), pages 77-92, October.
- Francesc Obiols-Homs, 2002. "Trade Effects on the Personal Distribution of Wealth," Working Papers 0208, Centro de Investigacion Economica, ITAM.
When requesting a correction, please mention this item's handle: RePEc:red:sed010:1172. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Zimmermann)
If references are entirely missing, you can add them using this form.