International Capital Movements in the OG Growth Model with Integenerational Transfer Motives

Young D. Yoon ()
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Young D. Yoon: Pusan National University, Pusan, Korea, Postal: College of Business, Pusan National University, Changjundong an 30, Kumjungku, Pusan, Koare

Journal of Economic Integration, 1998, vol. 13, 311-332

Abstract: This paper examines the long consequences of capital movements in overlapping generation growth model with bequest motive. Whereas there is only terms of trade effect of free capital movements across countries in the traditional of trade effect, and golden rule effect. In the capital-importing country the bequest reduction effect of lower interest rate disfavors the future them. In the capital-exporting country the bequest-accumulation effect and the terms of trade effect of higher iinteretst rate favors future generations while the golden rule effect of it disfavors them. Present paper singled out the bequest accumulation effect and the bequest reduction effect of the interest rate change caused by international capital movement. This paper also showed that there is close relationship between the welfare of future generations and their assets in the context of the OG model with bequest motive.

Keywords: International; Capital; Movements (search for similar items in EconPapers)
JEL-codes: F21 (search for similar items in EconPapers)
Date: 1998
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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0077

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