Endogenous inequality and fluctuations in a two-country model
We study a two-country version of Matsuyama's [K. Matsuyama, Financial market globalization, symmetry-breaking, and endogenous inequality of nations, Econometrica 72 (2004) 853-884] world economy model. As in Matsuyama's model, symmetry-breaking can be observed, and symmetry-breaking generates endogenously determined levels of inequality. In addition, we show that when the countries differ in population size, their interaction through credit markets may lead to persistent endogenous fluctuations.
Year of publication: |
2009
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Authors: | Kikuchi, Tomoo ; Stachurski, John |
Published in: |
Journal of Economic Theory. - Elsevier, ISSN 0022-0531. - Vol. 144.2009, 4, p. 1560-1571
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Publisher: |
Elsevier |
Keywords: | Credit market imperfection Endogenous cycles Symmetry-breaking Two-country model |
Saved in:
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