This paper develops a two-sector dynamic general equilibrium model of a small open economy in which production activities are accompanied by emission of pollution that has a negative welfare effect. It is shown that the dynamic equilibrium may display indeterminacy, i.e., continuum of dynamic...

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 paper develops a two-country model of intraindustry trade with trade costs, which can be reduced by public investment in an international infrastructure capital, the stock of which accumulates over time. Depending on the trade costs and international distribution of manufacturing firms,...