The effects of inflation are considered for a small open economy with overlapping generations and a cash-in-advance constraint on consumption. In an endowment economy with one good, the model recovers the adjustment mechanism underlying the monetary approach to the balance of payments, which...

This paper considers the implications of population mobility for risk sharing among individuals and among regions of a federation. There is an important interaction between risk sharing and interregional redistribution which precludes the regional authorities from fully exploiting gains from...

We suggest a simple variant of Uzawa preferences which has the same predictions as his formulation, but is less prone to criticism. We assume that the rate of time preference is an increasing function of the total value of current financial assets. It is shown that an increase in the rate of...

The effects of inflation are worked out for a small open economy with Cash-in-Advance (CIA) constraints on bond purchases. If all transactions are subject to CIA constraints, an increase in the inflation rate will reduce savings, bringing about a current account deficit, while the capital stock...

The effects of a terms of trade deterioration on the current account are studied when the representative agent has Marshallian preferences, with which the rate of time preference is a decreasing function of savings. A terms of trade deterioration reduces the permanent income of the...

Some recent empirical findings are used to motivate employing a model in which consumption exhibits durability, and habits develop over the flow of services provided by them, in order to study the effects of tariff protection on the current account. Durability leads to adjacent substitutability...