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Disequilibrium Growth Theory in an International Perspective

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  • van Marrewijk, Charles
  • Verbeek, Jos

Abstract

The authors examine a two-good, small, open economy characterized by sluggish real wage rate adjustment. This causes short-run unemployment or excess-demand on the labor market, which in turn affects the speed of capital accumulation. Global stability is ensured under certain conditions, otherwise local stability and 'box' stability hold but endless business cycles cannot be long-run effects, i.e., may affect the long-run capital-labor ratio. The model is applied to examine the dynamic implications of a change in the terms-of-trade and of real wage rigidity. Copyright 1993 by Royal Economic Society.

Suggested Citation

  • van Marrewijk, Charles & Verbeek, Jos, 1993. "Disequilibrium Growth Theory in an International Perspective," Oxford Economic Papers, Oxford University Press, vol. 45(2), pages 311-331, April.
    • Handle: RePEc:oup:oxecpp:v:45:y:1993:i:2:p:311-31
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    References listed on IDEAS

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    Cited by:

    1. Hiroaki Sasaki, 2011. "Trade, Non‐Scale Growth And Uneven Development," Metroeconomica, Wiley Blackwell, vol. 62(4), pages 691-711, November.
    2. van Marrewijk, Charles & Verbeek, Jos, 1994. "Two-sector disequilibrium growth," European Journal of Political Economy, Elsevier, vol. 10(2), pages 373-388, July.
    3. Charles Marrewijk & Jos Verbeek, 1993. "Sector-specific capital, “Bang-bang” investment, and the Filippov solution," Journal of Economics, Springer, vol. 57(2), pages 131-146, June.

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