Joseph Francois, Bradley McDonald, Hakan Nordström,
"Trade Liberalization and tne Capital Stock in a Multilateral Framework"
, in R.E. Baldwin and J.F. Francois, eds., Dynamic Issue in Applied Commercial Policy Analysis, Cambridge University Press, 1997
Trade Liberalization and tne Capital Stock in a Multilateral Framework
Sprache des Titels:
This paper explores trade policy and investment linkages in a multicountry framework.
This is done under alternative steady-state closure rules linking trade to consumption,
production, and investment, and emphasizing the general equilibrium nature of capital
accumulation mechanisms. When policy shocks are capital friendly, induced investment
may be greater than suggested by current savings rates. As a result, multiplier-type
analysis can be very misleading. The importance and direction of this magnification
hinges critically on the sensitivity of savings rates with respect to real returns. As
illustration, we offer a numerical assessment of the Uruguay Round, highlighting such
Sprache der Kurzfassung:
R.E. Baldwin and J.F. Francois, eds., Dynamic Issue in Applied Commercial Policy Analysis