Electronic Resource
Oxford, UK and Malden, USA
:
Blackwell Publishing Ltd
Review of international economics
12 (2004), S. 0
ISSN:
1467-9396
Source:
Blackwell Publishing Journal Backfiles 1879-2005
Topics:
Economics
Notes:
The paper presents an overlapping-generations model where agents vote on whether to open or close the economy to international capital flows. Political decisions are shaped by the risk over capital and labor returns. In an open economy, the capitalists (old) completely hedge their savings income. In contrast, in a closed economy, the workers (young) partially insulate wages from the productivity shocks. There are three possible equilibrium outcomes: economies that eventually remain open; those that eventually remain closed; and those that cycle between open and closed. In line with the stylized facts, cycles are more common in economies with intermediate development levels.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1111/j.1467-9396.2004.00458.x
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