Habits, costly investment, and current account dynamics

• 成果类型: Article
• 署名作者: Ikeda, S; Gombi, I
• 署名单位: University of Osaka; Hirosaki University
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/S0022-1996(98)00067-1
• 发表日期: 1999
• 页码: 363-384
• 关键词: habit; current account; INVESTMENT; savings; temporary shock

摘要

We analyze the current account dynamics for a small country model with habit-forming consumers and costly investment. The model has several empirical and policy implications. (i) It is consistent with stylized facts regarding the effects of productivity shocks and increases in fiscal spending and regarding the savings-investment co-movement. (ii) The long-run effect of a temporary shock on net foreign assets is often opposite to that of a permanent shock. (iii) Under strong habit persistence, the welfare dynamics are sluggish, so that a beneficial tax-financed fiscal policy may have a harmful hangover effect on welfare. (C) 1998 Elsevier Science B.V. All rights reserved. JEL classification: F32; F41; E21.