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Time Preference and International Trade

Author

Listed:
  • Kazumichi Iwasa

    (Research Institute for Economics and Business Administration, Kobe University, JAPAN)

  • Kazuo Nishimaura

    (Research Institute for Economics and Business Administration, Kobe University, JAPAN)

Abstract

We first consider a closed model, where households' time discount depends on externality in consumption. We can prove that there is a unique steady state, which is a saddle point. Then, we extend the model to a two country world, and derive the condition about the effects of consumption externality under which there is a unique free trade steady state with saddle-point stability.

Suggested Citation

  • Kazumichi Iwasa & Kazuo Nishimaura, 2020. "Time Preference and International Trade," Discussion Paper Series DP2020-10, Research Institute for Economics & Business Administration, Kobe University.
    • Handle: RePEc:kob:dpaper:dp2020-10
    as

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    File URL: https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2020-10.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Time preference; Consumption externality; Two-country model; Heckscher-Ohlin;
    All these keywords.

    JEL classification:

    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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