EconPapers    
Economics at your fingertips  
 

On the Role of Financial Frictions and the Saving Rate During Trade Liberalizations

Pol Antras and Ricardo Caballero ()

Journal of the European Economic Association, 2010, vol. 8, issue 2-3, 442-455

Abstract: We study how financial frictions and the saving rate shape the long-run effects of trade liberalization on income, consumption, and the distribution of wealth in financially underdeveloped economies. In our model, regardless of whether the capital account is open or not, trade liberalization reduces the share of wealth in the hands of entrepreneurs and may well reduce steady-state consumption and income. Furthermore, trade opening is more likely to reduce steady-state consumption and output, the higher is the level of financial development. For economies with an open capital account, a higher saving rate also increases the likelihood that a trade liberalization leads to a reduction in steady-state consumption and output. (JEL: E2, F1, F2, F3, F4) (c) 2010 by the European Economic Association.

JEL-codes: E2 F1 F2 F3 F4 (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations: View citations in EconPapers (9) Track citations by RSS feed

Downloads: (external link)
http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1542-4774/issues link to full text (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: On the Role of Financial Frictions and the Saving Rate during Trade Liberalizations (2010) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tpr:jeurec:v:8:y:2010:i:2-3:p:442-455

Ordering information: This journal article can be ordered from
http://www.mitpressjournals.org/jeea

Access Statistics for this article

Journal of the European Economic Association is currently edited by Xavier Vives, George-Marios Angeletos, Orazio P. Attanasio, Fabio Canova and Roberto Perotti

More articles in Journal of the European Economic Association from MIT Press
Bibliographic data for series maintained by Ann Olson ().

 
Page updated 2020-09-24
Handle: RePEc:tpr:jeurec:v:8:y:2010:i:2-3:p:442-455