SIZE, OPENNESS, AND MACROECONOMIC INTERDEPENDENCE

• 成果类型: Article
• 署名作者: Chudik, Alexander; Ma, Yanlei
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - Dallas; European Central Bank
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12208
• 发表日期: 2017
• 页码: 33-55
• 关键词: property-values; resource-allocation; political-economy; public-goods; voters; capitalization; expenditure; bureaucrats; EFFICIENCY; provision

摘要

One common, simplifying assumption in open economy macroliterature is that the rest of the world can be thought of as a representative economy. This article formally investigates conditions under which this assumption can be justified using a multicountry general equilibrium model as a laboratory. We derive the conditions that ensure the existence of the equilibrium and study the properties of the equilibrium using large N asymptotics. Thereby, we show that the two-country framework is a valid approximation only for economies that have diversified trade linkages and only when there is no globally dominant economy among the foreign economies.