Externalities and Price Dynamics
Manjira Datta
Working Papers from Arizona State University, Department of Economics
Abstract:
This paper analyzes dynamic movement of outputs and market- clearing when mutually interdependent economies trade. The equilibrium evolution of stocks admit the possibility of monotonic or cyclical behavior, even in the long run. However, the prices eventually reach a steady-state but may exhibit monotonic or oscillating behavior, in the short run. Also we show that higher consumption per unit of stock is associated with a lower productivity or with negative externalities. A stronger preference for the foreign good, increases or decreases consumption depending whether the externality is negative or positive.
Keywords: Externality; international trade (search for similar items in EconPapers)
JEL-codes: C73 D51 D90 F12 (search for similar items in EconPapers)
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Citations: View citations in EconPapers (6)
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Related works:
Journal Article: Externalities and Price Dynamics (1997)
Working Paper: Externalities and Price Dynamics (1994) 
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Persistent link: https://EconPapers.repec.org/RePEc:wop:astewp:9710
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