NORMATIVE TRADE THEORY IN A CONTEXT OF OVERLAPPING GENERATIONS AND INTER-GENERATIONAL BEQUESTS

Murray Kemp and Geoffrey Fishburn ()
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Geoffrey Fishburn: School of Social Sciences, University of New South Wales, Sydney 2052, Australia

Global Journal of Economics (GJE), 2013, vol. 02, issue 01, 1-7

Abstract: The core normative propositions of the theory of international trade have been established in the context of finite competitive economies of the Walras–Arrow–Debreu–McKenzie (WADM) type. Whether the propositions survive the recognition that economies might last for ever, with overlapping generations (OLGs) of mortal individuals and intergenerational bequests, is still unknown. In the present paper it is shown that none of the core propositions survives the recognition of inter-generational bequests but that, under a simple (but non-trivial) additional assumption, each of the core propositions is compatible both with OLGs and with inter-generational bequests.

Keywords: International trade normative propositions; overlapping generations; bequests; non-finite economies; JEL Classifications: F11; JEL Classifications: F13; JEL Classifications: H41 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (1)

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DOI: 10.1142/S2251361213500043

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