Capital Accumulation in the Open Two-Sector Economy

Smith, Marisol

doi:10.2307/2232086

Cited by 28 publications

(6 citation statements)

References 8 publications

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“…He finds that the capital exporting economy experiences a reduction of domestic wages. [42] provides an elegant model that incorporates capital accumulation in the standard two sector model used by [43]. He studies comparative dynamics of the single open economy under different scenarios of closure from the perspective of a single open economy that include conditions of constant capital-labor ratio, constant savings rate and constant profit rate.…”

Section: Asymmetric North-south Trade With Capital Accumulationmentioning

confidence: 99%

“…Similarly, Equation 40indicates that Southern output must grow at the same rate as Northern output, which in turn implies ˆN F g = . Finally, (42) indicates that employment growth in the South must proceed at the natural rate of growth in the North. This is the basic Findlay result: all sectors of the world economy grow at the North's natural rate in the steady state.…”

Section: Classical Equilibrium In North-south International Trade Framentioning

confidence: 99%

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Income Distribution and Terms-of-Trade under Generalized Returns to Scale and Capital Accumulation: Implications Using Classical Equilibrium Condition

Darity¹,

Lahiri²

2019

TEL

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This paper examines the implications of generalized returns to scale on the long-period equilibrium in an economy with 2 goods and 2 inputs where one of the inputs is a produced means of production. The Classical definition of long-period equilibrium defined by profit rates being equalized across sectors is used for closure. The model is initially characterized for a closed economy and then extended to a flexible-wage-North and surplus-labor-South model of trade where the North produces only capital and the South produces the consumption good using Northern capital. Neither full employment in the North nor balanced-growth of the integrated economy emerges under non-constant returns to scale. We characterize income distribution between labor and capital and movements of terms-of-trade between North and South.

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Section: Asymmetric North-south Trade With Capital Accumulationmentioning

confidence: 99%

Section: Classical Equilibrium In North-south International Trade Framentioning

confidence: 99%

Income Distribution and Terms-of-Trade under Generalized Returns to Scale and Capital Accumulation: Implications Using Classical Equilibrium Condition

Darity¹,

Lahiri²

2019

TEL

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“…Others who have also explored this issue areSmith (1976Smith ( , 1977 andSrinivasan and Bhagwati (1980). 2 Another commonly-used global model isG-Cubed (McKibbin & Wilcoxen, 1999).…”

mentioning

confidence: 99%

The Long-run Effects of Structural Change and the Treatment of International Capital Accumulation, Mobility and Ownership

Verikios

Hanslow²

2009

Global Economic Review

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Taking a commonly-used and commonly-available trade policy model as our starting point, we examine the long-run effects of large-scale structural change with and without international capital accumulation, mobility and ownership. We demonstrate the relative merits and limitations of different treatments of international capital accumulation, mobility and ownership. In doing so, we present a treatment of international capital accumulation, mobility and ownership that gives policy analysts an approach to analysing the effects of large-scale structural policies that is not too heavy in its theoretical and data demands. Our findings support the work of Baldwin and others who have demonstrated that ignoring capital accumulation, mobility and ownership underestimates net output and welfare effects of large-scale structural change.Computable general equilibrium models, capital accumulation, international capital mobility and ownership, structural change,

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“…If the capital goods are exported, we have to have a tariff (subsidy) on export as the saving is less (more) than the optimal. While here we are concerned with the second best trade policies when the optimal condition on saving is not satisfied, Smith [1977] considers the converse second best problems that the usual rule for optimal saving will not continue to be valid if trade policies are not optimal.…”

mentioning

confidence: 99%

Developments of International Trade Theory

Negishi

2001

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Capital Accumulation in the Open Two-Sector Economy

Cited by 28 publications

References 8 publications

Income Distribution and Terms-of-Trade under Generalized Returns to Scale and Capital Accumulation: Implications Using Classical Equilibrium Condition

Income Distribution and Terms-of-Trade under Generalized Returns to Scale and Capital Accumulation: Implications Using Classical Equilibrium Condition

The Long-run Effects of Structural Change and the Treatment of International Capital Accumulation, Mobility and Ownership

Developments of International Trade Theory

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