Short-Run Analysis of Income Fluctuation and Optimum Foreign Borrowing in the Bardhan-Pitchford Model

Heng-Fu Zou ()

No 433, CEMA Working Papers from China Economics and Management Academy, Central University of Finance and Economics

Abstract: This paper utilizes the technique developed by Kenneth Judd to quantify the short-run effects of temporal income falls on the current account. It is found that (a) for both a fixed time discount rate and an endogenous discount rate, a future, temporal fall in income improves the initial current account; (b) with a current income fall and with no future income change, the initial current account deteriorates; (c) but when a current income fall is combined with a future income fall, the effect on the initial current account is ambiguous.

Pages: 13 pages
Date: 2011
References: Add references at CitEc
Citations:

Downloads: (external link)
http://down.aefweb.net/WorkingPapers/w433.pdf (application/pdf)

Related works:
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:cuf:wpaper:433

Access Statistics for this paper

More papers in CEMA Working Papers from China Economics and Management Academy, Central University of Finance and Economics Contact information at EDIRC.
Bibliographic data for series maintained by Qiang Gao ().