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A Growth Theory Based on Walrasian General Equilibrium, Solow-Uzawa Growth, and Heckscher-Ohlin Trade Theories

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  • Wei-Bin Zhang

    (Ritsumeikan Asia Pacific University, College of Asia Pacific Management, Oita Prefecture, Japan)

Abstract

The purpose of this study is to analyse the role of preferences and technological differences between countries in determining dynamics of capital accumulation, wealth and income distribution within countries and between countries, and patterns of trade in a dynamic general equilibrium framework. The model is built by integrating Walrasian general equilibrium, neoclassical growth, and H O international trade theories. The model is built for any number of countries and each country is composed of three production sectors and heterogeneous households. The national growth mechanism is the same as that in neoclassical growth theory. Labour and capital distributions among sectors and among countries are determined under perfect competition and free trade. The model synthesizes the well-known H O and the Oniki-Uzawa trade models, Solow-Uzawa neoclassical growth theory, and Walrasian general equilibrium theory with Zhang's utility function. We simulated the model with three national economies and with two groups of households for each country. We identified the existence of equilibrium points and plot motion of the dynamic system. We also conducted a comparative dynamic analysis.

Suggested Citation

  • Wei-Bin Zhang, 2018. "A Growth Theory Based on Walrasian General Equilibrium, Solow-Uzawa Growth, and Heckscher-Ohlin Trade Theories," Interdisciplinary Description of Complex Systems - scientific journal, Croatian Interdisciplinary Society Provider Homepage: http://indecs.eu, vol. 16(3-B), pages 452-464.
    • Handle: RePEc:zna:indecs:v:16:y:2018:i:3-b:p:452-464
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    References listed on IDEAS

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    1. Zhiqi Chen, 1992. "Long-Run Equilibria in a Dynamic Heckscher-Ohlin Model," Canadian Journal of Economics, Canadian Economics Association, vol. 25(4), pages 923-943, November.
    2. Wei-Bin Zhang, 2015. "How Do The Richest 1% Own 50% Of Global Wealth In An Integrated Walrasin-General-Equilibrium And Oniki-Uzawa S Trade Theory," Journal of Academic Research in Economics, Spiru Haret University, Faculty of Accounting and Financial Management Constanta, vol. 7(1 (March)), pages 7-44.
    3. H. Oniki & H. Uzawa, 1965. "Patterns of Trade and Investment in a Dynamic Model of International Trade," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 32(1), pages 15-37.
    4. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    5. Zhang Wei-Bin, 2015. "A Synthesis of the Heckscher-Ohlin and Oniki-Uzawa Trade Models with Heterogeneous Tastes, Different Technologies, and Endogenous Wealth," Scientific Annals of Economics and Business, Sciendo, vol. 62(3), pages 391-410, November.
    6. Wei-Bin Zhang, 2015. "How do the Richest 1% Own 50% of the National Wealth in an Integrated Walrasian Equilibrium and Neoclassical Growth Model," The International Journal of Economic Behavior - IJEB, Faculty of Business and Administration, University of Bucharest, vol. 5(1), pages 59-80, December.
    7. Ikeda, Shinsuke & Ono, Yoshiyasu, 1992. "Macroeconomic Dynamics in a Multi-country Economy: A Dynamic Optimization Approach," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 33(3), pages 629-644, August.
    8. Wei-Bin Zhang, 2008. "International Trade Theory," Springer Books, Springer, number 978-3-540-78265-0, October.
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    Cited by:

    1. Wei-Bin Zhang, 2020. "Global Development, Trade, Human Capital, And Business Cycles," Oradea Journal of Business and Economics, University of Oradea, Faculty of Economics, vol. 5(special), pages 9-29, June.

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    More about this item

    Keywords

    trade pattern; H O model; Walrasian general equilibrium theory; neoclassical growth theory; income and wealth distribution;
    All these keywords.

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • E47 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Forecasting and Simulation: Models and Applications

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