Intergenerational and International Trade

25 Pages Posted: 4 Mar 2007 Last revised: 2 Sep 2022

See all articles by Rudiger Dornbusch

Rudiger Dornbusch

Massachusetts Institute of Technology (MIT) (Deceased)

Date Written: October 1981

Abstract

The paper sets out an overlapping generations model in an open economy context. In the absence of productive capital a real consol is the vehicle for intertemporal consumption smoothing. The presence of a long term asset implies that the anticipated future path of the economy, through the term structure of interest, affects current generations. The model is applied to issues in the closed and open economy. These include the effects of debt issue on asset prices and welfare, the effect of present or anticipated future income growth, permanent or transitory. In the open economy context we investigate the welfare and current account effects of income changes on debt issue. The role of international differences in risk aversion is studied.

Suggested Citation

Dornbusch, Rudiger W., Intergenerational and International Trade (October 1981). NBER Working Paper No. w0792, Available at SSRN: https://ssrn.com/abstract=967944

Rudiger W. Dornbusch (Contact Author)

Massachusetts Institute of Technology (MIT) (Deceased)

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
33
Abstract Views
405
PlumX Metrics