Durable Goods, Time Preference and The Dynamics of the Current Account

Autor:	Arman Mansoorian, Mohammed Mohsin
Rok vydání:	2007
Předmět:	Microeconomics Economics and Econometrics Net asset value Small open economy Economics Current account Durable good Time preference Terms of trade Stock (geology)
Zdroj:	Open Economies Review. 19:337-354
ISSN:	1573-708X 0923-7992
DOI:	10.1007/s11079-007-9013-0
Popis:	A small open economy model with an endogenous time preference is used to study the current account dynamics when consumption exhibits durability. There is a unique level of instantaneous utility and stock of durables that must be maintained in the steady state. A terms of trade deterioration requires a net asset accumulation and a fall in consumption expenditures along the adjustment path. Nevertheless, the fall in consumption expenditures leads to a fall in the stock of durables, which has to be corrected somewhere along the adjustment path, and which may lead to a non-monotonic adjustment of the current account (J-curve).
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::8771f81d97cb0700a7c3b8a04a7e4cc5 https://doi.org/10.1007/s11079-007-9013-0 Zobrazit plný text záznamu Full text from SpringerLink