Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92636
Authors: 
Hirose, Ken-Ichi
Ikeda, Shinsuke
Year of Publication: 
2013
Series/Report no.: 
ISER Discussion Paper, Institute of Social and Economic Research, Osaka University 882
Abstract: 
This research is the first to examine dynamic general equilibrium in a growing two-country economy under decreasing marginal impatience (DMI). The stability condition is shown to be more restrictive than in the case of an endowment economy and/or under increasing marginal impatience (IMI). By analyzing global-economy adjustment to time preference shocks, international transfers, and productivity shocks, equilibrium dynamics in the presence of DMI differ drastically from what is obtained when the standard IMI model is used. For example, in a country characterized by DMI, a positive productivity shock improves the country's welfare level and lowers its steady-state time preference and, hence, the steady-state interest rate. This leads to an increase in the neighboring country.s capital stock.
Subjects: 
decreasing marginal impatience
two-country economy
capital accumulation
JEL: 
F41
F32
E00
Document Type: 
Working Paper

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