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The Long-Run Effects of Structural Change and the Treatment of International Capital Accumulation, Mobility and Ownership

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  • George Verikios
  • Kevin Hanslow

Abstract

Taking a commonly-used and commonly-available trade policy model as our starting point, we examine the long-run effects of large-scale structural change with and without international capital accumulation, mobility and ownership. We demonstrate the relative merits and limitations of different treatments of international capital accumulation, mobility and ownership. In doing so, we present a treatment of international capital accumulation, mobility and ownership that gives policy analysts an approach to analysing the effects of large-scale structural policies that is not too heavy in its theoretical and data demands. Our findings support the work of Baldwin (1992) and others who have demonstrated that ignoring capital accumulation, mobility and ownership underestimates net output and welfare effects of large-scale structural change.

Suggested Citation

  • George Verikios & Kevin Hanslow, 2009. "The Long-Run Effects of Structural Change and the Treatment of International Capital Accumulation, Mobility and Ownership," Centre of Policy Studies/IMPACT Centre Working Papers g-179, Victoria University, Centre of Policy Studies/IMPACT Centre.
    • Handle: RePEc:cop:wpaper:g-179
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    More about this item

    Keywords

    computable general equilibrium models; capital accumulation; international capital mobility and ownership; structural change;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • F15 - International Economics - - Trade - - - Economic Integration
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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