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The Solow Model of the Small Open Economy

  • Michael Bräuninger
Chapter
  • 142 Downloads
Part of the Contributions to Economics book series (CE)

Abstract

This chapter considers public debt in a small open economy. Most of the literature on endogenous growth in open economies concentrate on trade effects as introduced in Grossman and Helpman (1991). In these models there is no capital mobility. In contrast to this literature we allow for capital mobility and concentrate on intertemporal trade as in Buiter (1981) and Frenkel and Razin (1987). So opening the economy adds the dynamics of foreign debt growth. The production structure is assumed to be of AK type and households are assumed to save a constant fraction of their disposable income. The basic model, without public debt, is presented in Carlberg (1997).

Keywords

Public Debt Budget Deficit Capital Growth Small Open Economy Foreign Asset 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer-Verlag Berlin Heidelberg 2003

Authors and Affiliations

  • Michael Bräuninger
    • 1
  1. 1.Institut für Theoretische VolkswirtschaftslehreUniversität der Bundeswehr HamburgHamburgGermany

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