A Perfect Foresight Model of Economic Growth, Inflation and the Balance of International Indebtedness

Milton Pappas

Chapter 22 in Economic Development and World Debt, 1989, pp 277-295 from Palgrave Macmillan

Abstract: Abstract This paper develops and analyses a perfect foresight model of economic growth, inflation, and the balance of international indebtedness for a small, fully employed debtor economy operating under a flexible exchange rate system. This model differs from other growth-cum-debt models in that it is a one-sector growth model in which the relative price of installed capital adjusts along the dynamic path in such a way as to preserve international security arbitrage between the home country and the rest of the world.

Keywords: Capita Stock; Capita Level; Monetary Expansion; Real Capital; Monetary Equilibrium (search for similar items in EconPapers)
Date: 1989
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-20044-3_22

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DOI: 10.1007/978-1-349-20044-3_22

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