Trade and Indeterminacy in a Dynamic General Equilibrium Model

This paper introduces sector-specific externalities in the Heckscher-Ohlin two-country dynamic general equilibrium model to show that indeterminacy of the equilibrium path in the would market can occur. Under certain conditions in terms of factor intensities, there are multiple equilibrium paths from the same initial distribution of capital in the world market, and the distribution of capital in the limit differs among equilibrium paths.

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Year of publication:	2001-01
Authors:	Shimomura, Koji ; Nishimura, Kazuo
Institutions:	Research Institute for Economics and Business Administration, Kobe University
Subject:	Externalities \| Economic models \| Market

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Extent:	application/pdf
Series:	Discussion Paper Series. - ISSN 1345-2207.
Type of publication:	Book / Working Paper
Notes:	Number 117 13 pages
Classification:	E13 - Neoclassical ; F11 - Neoclassical Models of Trade
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005650727