Abstract
This paper develops and analyses a perfect foresight model of economic growth, inflation, and the balance of international indebtedness for a small, fully employed debtor economy operating under a flexible exchange rate system. This model differs from other growth-cum-debt models in that it is a one-sector growth model in which the relative price of installed capital adjusts along the dynamic path in such a way as to preserve international security arbitrage between the home country and the rest of the world.
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© 1989 H. W. Singer and Soumitra Sharma
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Pappas, M. (1989). A Perfect Foresight Model of Economic Growth, Inflation and the Balance of International Indebtedness. In: Singer, H.W., Sharma, S. (eds) Economic Development and World Debt. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-20044-3_22
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DOI: https://doi.org/10.1007/978-1-349-20044-3_22
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-20046-7
Online ISBN: 978-1-349-20044-3
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