A Disequilibrium Model of International Capital Mobility
Paper presented at the 2nd Annual Conference on Global Economics Analysis, Denmark, June 20-22. The paper proposes a new disequilibrium approach to modeling international capital mobility for a dynamic multi- region general equilibrium model. Key to this approach are errors in investors’ assessments of potential returns to capital, such as those recently observed in Asia. The investment theory, compatible with a simple recursive solution procedure, ensures the convergence of the model towards a stable equilibrium, brings realism into the analysis of international capital mobility and flexibility in tailoring to empirical data. The paper discusses two numerical examples, demonstrating the long- run convergence of the model and the dynamic adjustment to a deeper, longer crisis in Asia.
Year of publication: |
2000
|
---|---|
Authors: | Ianchovichina, Elena ; McDougall, Robert ; Hertel, Thomas W. |
Institutions: | Center for Global Trade Analysis (GTAP), Department of Agricultural Economics |
Saved in:
freely available
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