GOLD AND LAND PRICES WITH CAPITAL ACCUMULATION IN AN ECONOMY WITH INDUSTRIAL AND AGRICULTURAL SECTORS

Wei-Bin Zhang

Annals - Economy Series, 2016, vol. 2, 16-29

Abstract: The purpose of this study is to examine dynamic interactions among gold value, land price and economic structure in a growth model with capital accumulation. The paper proposes a two-sector general equilibrium model with land and gold prices as endogenous variables. The economy consists of industrial and agricultural sectors with fixed land and gold. Land is used for residential use and agricultural production and gold is used for saving and decorations. The portfolio equilibrium growth model is based on the neoclassical growth theory and Ricardian theory. We simulate the model to demonstrate that the economic system has a unique stable steady state. We show how exogenous changes in preference and technology affect the transitory processes and long-term equilibrium.

Keywords: Ggold value; land value; growth model; wealth accumulation; portfolio equilibrium (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (2)

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