Terms of trade and the current account:: a two-country/two-sector growth model

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Title: Terms of trade and the current account:: a two-country/two-sector growth model
Authors: Guillo, Maria Dolores
Research Group/s: Grupo de Estudios de Paz y Desarrollo (GEPYD)
Center, Department or Service: Universidad de Alicante. Departamento de Métodos Cuantitativos y Teoría Económica
Keywords: Terms-of-trade | Overlapping generations | Two-sector growth
Knowledge Area: Fundamentos del Análisis Económico
Issue Date: Mar-1995
Publisher: Instituto Valenciano de Investigaciones Económicas
Citation: GUILLÓ, María Dolores. Terms of trade and the current account:: a two-country/two-sector growth model. Valencia : Instituto Valenciano de Investigaciones Económicas, 1995. (WP-AD 95-03). ISBN 84-482-0898-6, 36 p.
Abstract: This paper examines the equilibrium relation, within the non-specialized area, between the current account and the terms-of-trade in a two-country/two-sector growth model. Along a convergent equilibrium path, this relation can have any sign depending on the trading sectors' relative factor intensities and on the steady state relative price slopes of demand for and supply of investment goods. It is also shown that a negative association between capital accumulation and the terms-of-trade for the exporter of capital intensive goods does not require an import sector growing faster than the export sector.
Sponsor: Financial support from the Sloan Foundation and the Spanish DGICYT research project PB92-0342.
URI: http://hdl.handle.net/10045/23677
ISBN: 84-482-0898-6
Language: eng
Type: info:eu-repo/semantics/workingPaper
Peer Review: si
Appears in Collections:INV - GEPYD - Working Papers
INV - DMCTE - Working Papers

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