Harashima, Taiji (2009): Endogenous Growth Models in Open Economies: A Possibility of Permanent Current Account Deficits.
This is the latest version of this item.
Download (260kB) | Preview
The paper examines the impacts of heterogeneity in the degree of relative risk aversion on the balance on current account in the framework of endogenous growth, and concludes that, like heterogeneity in demographic changes, heterogeneity in the degree of relative risk aversion generates persisting current account imbalances. The imbalance continues permanently, but its ratio to outputs stabilizes. With evidence in many empirical studies that the degree of relative risk aversion in Japan is relatively higher than that in the U.S., the paper argues that the persisting bilateral trade deficit of the U.S. with Japan is partially generated by this mechanism.
|Item Type:||MPRA Paper|
|Original Title:||Endogenous Growth Models in Open Economies: A Possibility of Permanent Current Account Deficits|
|Keywords:||Current account; Trade deficits; Capital flows; Endogenous growth; Risk aversion; Japan|
|Subjects:||F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment; Long-Term Capital Movements
F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F41 - Open Economy Macroeconomics
F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies
E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E10 - General
O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General
|Depositing User:||Taiji Harashima|
|Date Deposited:||24. Dec 2009 00:59|
|Last Modified:||11. Feb 2013 17:21|
Aghion, Philippe and Peter Howitt. (1998). Endogenous Growth Theory, Cambridge, MA, MIT Press.
Becker, Robert A. (1980). “On the long-run steady state in a simple dynamic model of equilibrium with heterogeneous households,” The Quarterly Journal of Economics, Vol. 95, 375-382.
Brooks, Robin. (2003). “Population Aging and Global Capital Flows in a Parallel Universe,” IMF Staff Papers, Vol. 50, No. 2, 200-221.
Farmer, Roger E. A. and Amartya Lahiri. (2004). “Recursive Preferences and Balanced Growth,” mimeo.
Faruqee, Hamid and Martin Mühleisen. (2003). “Population Aging in Japan: Demographic Shock and Fiscal Sustainability,” Japan and the World Economy, Vol. 15, 185-210.
Ghiglino, Christian. (2002). “Introduction to a General Equilibrium Approach to Economic Growth,” Journal of Economic Theory, Vol. 105, 1-17.
Harashima, Taiji. (1998). “Process of Generation of Japanese Economic System,” Osaka economic papers, Osaka University, Vol. 48, No. 2, 106-122 (in Japanese).
Harashima, Taiji. (2004). “A New Asymptotically Non-Scale Endogenous Growth Model,” EconWPA Working Papers, ewp-dev/0412009.
Jacobs, Jane. (1969). The Economy of Cities, Random House, New York.
Jones, Charles I. (1995a). “Time series test of endogenous growth models,” Quarterly Journal of Economics, Vol. 110, pp. 495-525.
Jones, Charles I. (1995b). “R&D-Based Models of Economic Growth,” Journal of Political Economy, Vol. 103, pp. 759-784.
Jones, Charles I. (2003). “Population and Ideas: A Theory of Endogenous Growth,” in P. Aghion, R. Frydman, J. Stiglitz and M. Woodford, eds., Knowledge, Information, and Expectations in Modern Macroeconomics: In honor of Edmund S. Phelps, Princeton University Press.
Kaldor, N. (1961). “Capital Accumulation and Economic Growth,” Cap. 10 of A. Lutz and D. C. Hague (eds.), The Theory of Capital, St. Martin’s Press, New York.
Kotlikoff, Laurence J., Kent Smetters and Jan Walliser. (2001). “Finding a Way Out of America’s Demographic Dilemma,” NBER Working Paper, No. 8258.
Nakagawa, Shinobu and Tomoko Shimizu. (2000). “Portfolio Selection of Financial Assets by Japan's Households- Why Are Japan's Households Reluctant to Invest in Risky Assets?” Bank of Japan Research Papers 2000.
Nakamura T, Muramatsu T, Ono Y, Matsushita S, Higuchi S, Mizushima H, Yoshimura K, Kanba S, Asai M. (1997). ”Serotonin transporter gene regulatory region polymorphism and anxiety-related traits in the Japanese,” American Journal of Medical Genetics, Vol. 74, No. 5, pp. 544-545.
Obstfeld, Maurice and Kenneth Rogoff. (1995). “The Intertemporal Approach to the Current Account,” in G. Grossman and K. Rogoff (eds.), Handbook of International Economics, Vol. 3, Amsterdam, North Holland.
Ono Y, Manki H, Yoshimura K, Muramatsu T, Mizushima H, Higuchi S, Yagi G, Kanba S, Asai M. (1997). “Association between dopamine D4 receptor (D4DR) exon III polymorphism and novelty seeking in Japanese subjects,” American Journal of Medical Genetics, Vol. 74, No. 5, pp. 501-503.
Peretto, Pietro and Sjak Smulders. (2002). “Technological Distance, Growth and Scale Effects,” The Economic Journal, Vol. 112, pp. 603-624.
Poterba, James M. (2001). ”Demographic Structure and Asset Returns,” The Review of Economics and Statistics, Vol. 83, No. 2, 565-584.
Romer, P. M. (1990). “Endogenous Technological Change,” Journal of Political Economy, Vol. 98, pp. S71-S102.
Sorger, Gerhard. (2002). “On the Long-run Distribution of Capital in the Ramsey Model,” Journal of Economic Theory, Vol. 105, 226-243.
Szpiro, George G. (1986). ”Relative risk aversion around the world,” Economic letters, Vol. 20, No.1, 19-21.
Available Versions of this Item
Endogenous Growth Models in Open Economies: A Possibility of Permanent Current Account Deficits. (deposited 16. Dec 2009 14:30)
- Endogenous Growth Models in Open Economies: A Possibility of Permanent Current Account Deficits. (deposited 24. Dec 2009 00:59) [Currently Displayed]