Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/68855
Authors: 
Harms, Philipp
Year of Publication: 
2001
Series/Report no.: 
Diskussionsbeiträge: Serie 1, Fachbereich Wirtschaftswissenschaften, Universität Konstanz 315
Abstract: 
This paper studies how removing barriers to competition in the nontraded goods sector affects the current account, the real exchange rate, and factor prices in a small open economy. We show that the expansion of the nontraded sector that results from a deregulation shock is associated with an accumulation of foreign assets unless production of nontraded goods is very capital-intensive. Moreover, while the real exchange rate decreases monotonically towards its new steady state, the real wage may temporarily overshoot its long-run level.
Subjects: 
deregulation
imperfect competition
current account
nontraded goods
JEL: 
D43
F32
F41
Document Type: 
Working Paper

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