| Description |
1 online resource (18 pages) : illustrations |
| Series |
IMF working paper, 2227-8885 ; WP/04/31 |
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IMF working paper ; WP/04/31.
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| Contents |
""Contents""; ""I. INTRODUCTION""; ""II. FRICTION MECHANISM""; ""III. MODEL OF CAPITAL ACCUMULATION WITH IMPERFECT CAPITAL MOBILITY""; ""A. Firms and Household Sector""; ""B. Short-Sighted Friction""; ""C. Far-Sighted Friction""; ""IV. CONCLUSION""; ""REFERENCES"" |
| Summary |
This paper introduces a tractable capital market friction mechanism that allows a break of the parity between domestic and external interest rates and generates a gradual evolution of capital stock and other macroeconomic variables-in contrast to the instantaneous convergence found in models with interest rate parity. The friction, derived from explicit microfoundations, is such that the cost of new loans is an increasing function of net borrowing. The paper also presents a two-sector, open economy model of capital accumulation, where the friction mechanism is combined with standard assumptions about household preferences and production technology, which generates plausible dynamics of macroeconomic variables |
| Bibliography |
Includes bibliographical references (pages 17-18) |
| Notes |
Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002. http://purl.oclc.org/DLF/benchrepro0212 MiAaHDL |
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digitized 2010 HathiTrust Digital Library committed to preserve pda MiAaHDL |
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Print version record |
| Subject |
Capital movements -- Econometric models
|
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Capital investments -- Econometric models
|
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Foreign exchange rates -- Econometric models
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Capital investments -- Econometric models
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Capital movements -- Econometric models
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Foreign exchange rates -- Econometric models
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| SUBJECT |
Capital mobility -- Econometric models
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| Form |
Electronic book
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| Author |
IMF Institute, issuing body.
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| ISBN |
1451892551 |
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9781451892550 |
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1281089001 |
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9781281089007 |
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9781451845051 |
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1451845057 |
| ISSN |
2227-8885 |
|
