Technological dependence and budgetary policy in an uncertain horizon model of small open economy

Dai, Meixing (1992): Technological dependence and budgetary policy in an uncertain horizon model of small open economy.

Abstract

It is set up in this paper a formulation which endogeneizes the choice of investment inputs in open economy context where a small country may depend on foreign technology. Then it is integrated into a macroeconomic model of small specialized country with Blanchard-Yaari type uncertain horizon consumers. Contrary to some models with ad hoc formulation, it is found in this model that generally the budgetary policy has eects on the short- and long-run capital stock. The corresponding intertemporal spill-over effects of the budgetary policy, through the supply side of economy on external position, aggregate consumption, real exchange rate and capital evaluation ratio, are also examined.

• Item Type: MPRA Paper
• Language: English
• Keywords: Technological dependence, choice of investment inputs, capital stock, capital evaluation ratio, real exchange rate and external position
• Subjects: F - International Economics > F3 - International Finance > F34 - International Lending and Debt Problems; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F41 - Open Economy Macroeconomics

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