Trade and indeterminacy in a dynamic general equilibrium model

• 成果类型: Article
• 署名作者: Nishimura, K; Shimomura, K
• 署名单位: Kyoto University; Kobe University
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1006/jeth.2001.2892
• 发表日期: 2002
• 页码: 244-260
• 关键词: Indeterminacy; Externality; two-country Heckscher-Ohlin model; trade pattern

摘要

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 world 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. One equilibrium path converges to a long-run equilibrium in which the international ranking of factor endowment ratios differs from the initial ranking; another equilibrium path maintains the initial ranking and converges to another Iong-run equilibrium. Since the path realized is indeterminate, so is the long-run trade pattern. Therefore, the Long-Run Heckscher-Ohlin prediction is vulnerable to the introduction of externality. Journal of Economic Literature Classification Numbers: E13, E32, F11, F43. (C) 2002 Elsevier Science (USA).