Neoclassical Growth in an Interdependent World

Benny Kleinman, Ernest Liu, Stephen Redding and Motohiro Yogo

No 18654, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We develop a tractable, multi-country, open-economy model of neoclassical growth. We use this quantitative framework to study the determinants of growth and convergence (as a central issue in macroeconomics) and the welfare effects of international integration or disintegration (as a central issue in international economics). Trade and capital market frictions interact to determine steady-state outcomes, growth along the transition path, and welfare. Capital accumulation is a key margin through which both frictions affect welfare. Speeds of convergence for assets and capital differ and are jointly determined. Unexpected shocks have valuation effects that depend on bilateral gross capital positions.

JEL-codes: F10 F21 F60 (search for similar items in EconPapers)
Date: 2023-12
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Related works:
Working Paper: Neoclassical growth in an interdependent world (2023)
Working Paper: Neoclassical growth in an interdependent world (2023)
Working Paper: Neoclassical Growth in an Interdependent World (2023)
Working Paper: Neoclassical Growth in an Interdependent World (2023)
Working Paper: Neoclassical Growth in an Interdependent World (2023)
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