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Trade, FDI, and Congestion - The small and very open Economy

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  • Kristof Dascher

    (University College Dublin)

Abstract

Typically, a small and open economy trades goods at given world prices. Here, we present a model of a very open small economy, where capital and labor are internationally mobile, too. When investing into infrastructure, the economy’s government attracts not only mobile capital but mobile labor, also. These capital and labor inflows into the economy reinforce each other. They contribute to rising welfare for land owning indigenous households. But all potential benefits for land renting immigrant households are capitalized into higher land rents. - The paper is also an attempt to give an account of the recent economic boom in Ireland.

Suggested Citation

  • Kristof Dascher, 2000. "Trade, FDI, and Congestion - The small and very open Economy," Working Papers 200009, School of Economics, University College Dublin.
    • Handle: RePEc:ucn:wpaper:200009
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    File URL: http://www.ucd.ie/economics/research/papers/2000/WP00.09.pdf
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    References listed on IDEAS

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    Cited by:

    1. Dascher, Kristof, 2012. "Home Voters, House Prices, and the Political Economy of Zoning," VfS Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62069, Verein für Socialpolitik / German Economic Association.
    2. Frank Barry & Michael B. Devereux, 2006. "A Theoretical Growth Model for Ireland," The Economic and Social Review, Economic and Social Studies, vol. 37(2), pages 245-262.
    3. Michael Anyadike-Danes & Helena Lenihan & Mike Hart, 2009. "New Business Formation: An Important Element of Ireland's Rapid Growth Experience?," Working Papers wp380, Centre for Business Research, University of Cambridge.
    4. Barry, Frank, 2005. "Future Irish Growth: Opportunities, Catalysts, Constraints," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI), vol. 2005(4-Winter), pages 1-25.

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    More about this item

    Keywords

    Foreign Direct Investment; Small Open Economy; Open City;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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