Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/128014
Authors: 
Harms, Philipp
Year of Publication: 
2002
Series/Report no.: 
Working Paper, Study Center Gerzensee 02.07
Abstract: 
We use a dynamic general-equilibrium model to study how removing barriers to competition in the nontraded goods sector affects the current account of a small open economy. We show that the expansion of the nontraded sector that results from such a "deregulation shock" is associated with an accumulation of foreign assets unless the production of nontraded goods is very capital-intensive. We then investigate whether a measure of domestic deregulation does, in fact, help to explain countries' current account balances in recent decades, and find some empirical support for the model's predictions.
Subjects: 
International macroeconomics
nontraded goods
current account
deregulation
imperfect competition
JEL: 
F41
D43
F32
Document Type: 
Working Paper

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