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Growth and the Current Account in a Small Open Economy


Benge, M and Wells, GM, Growth and the Current Account in a Small Open Economy, The Journal of Economic Education, 33, (2) pp. 152-165 . ISSN 0022-0485 (2002) [Refereed Article]

DOI: doi:10.1080/00220480209596464


The authors provide a framework with which to analyze growth in a small economy with perfect capital mobility. The framework provides a diagrammatic representation of steady states that differs in interesting and important ways from the usual closed-economy Solow-Swan diagram. The authors use the key diagrams to illustrate the effects of changes in parameters such as the saving rate and productivity growth on steady-state values of macroeconomic aggregates. They compare the steady-state results for the open economy with those obtained using the more familiar closed-economy model. They illustrate the possibility of endogenous income growth. © 2002 Taylor & Francis Group, LLC.

Item Details

Item Type:Refereed Article
Research Division:Human Society
Research Group:Policy and administration
Research Field:Economic development policy
Objective Division:Economic Framework
Objective Group:Macroeconomics
Objective Field:Balance of payments
UTAS Author:Wells, GM (Associate Professor Graeme Wells)
ID Code:35425
Year Published:2002
Web of Science® Times Cited:3
Deposited By:Economics and Finance
Deposited On:2005-08-10
Last Modified:2005-08-10

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