Time Preference and International Trade

Kazumichi Iwasa and Kazuo Nishimura
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Kazumichi Iwasa: Research Institute for Economics and Business Administration, Kobe University, JAPAN
Kazuo Nishimura: Research Institute for Economics and Business Administration, Kobe University, JAPAN

No DP2020-10, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: We first consider a closed model, where households' time discount depends on externality in consumption. We can prove that there is a unique steady state, which is a saddle point. Then, we extend the model to a two country world, and derive the condition about the effects of consumption externality under which there is a unique free trade steady state with saddle-point stability.

Keywords: Time preference; Consumption externality; Two-country model; Heckscher-Ohlin (search for similar items in EconPapers)
JEL-codes: E13 E21 F11 F43 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2020-02
New Economics Papers: this item is included in nep-int and nep-mac
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