This paper presents a two-sector dynamic general equilibrium model in a small open economy and considers the role of endogenous impatience and consumption externalities in a neoclassical growth model. In the case of socially increasing marginal impatience, there exists a unique and saddle-point...

This study re-examines McMillan’s analysis (1978) of a dynamic small open economy with a public intermediate good. On the trade patterns of the open economy, we find results that were overlooked in McMillan’s analysis. Among others, if labor endowment is of intermediate size, there are...