ISSN:
1573-708X
Keywords:
transitory savings
;
current account
;
net foreign assets
;
overshooting
;
F13
;
F32
;
F41
Source:
Springer Online Journal Archives 1860-2000
Topics:
Economics
Notes:
Abstract The article analyzes the dynamic effects of tariff liberalization on a small open economy. The primary focus is on nonmonotonic adjustment patterns of net lending such as overshooting or opposite short-and long run effects. When capital accumulation tilts wage income toward the future in the early transition periods, present generations perceive life-cycle type savings disincentives which create a transitory shortfall in savings. In the long run, wage profiles become flat again, and the savings deficiency vanishes. The transitory savings component may give rise to overshooting or opposite short- and long-run adjustment in the total stock of savings and net foreign assets.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1007/BF01886823
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