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| Author: | Ghiglino, C. Olszak-Duquenne, M. |
| Title: | Inequalities and fluctuations in a dynamic general equilibrium model |
| Journal: | Economic Theory
2001 : VOL. 17:1, p. 1-24 |
| Index terms: | GROWTH STEADY STATE MODELS INEQUALITY INTERNATIONAL TRADE |
| Language: | eng |
| Abstract: | The paper considers the issue of how heterogeneity across agents affects the dynamics exhibited by intertemporal economies. In the present paper a tractable two-sector neo- classical growth model with heterogeneous agents is considered. The local dynamic properties of the equilibrium path are analysed in relation with the underlying characteristics of the economy. In particular, the existence of fluctuations is related to the degree of heterogeneity in labor and in capital endowments. When applied to international trade theory, the analysis shows that free trade may distabilize a world economy that is originally stable under the regime of autarky. The paper provides a substantial list of references on this subject. |
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