NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Intergenerational and International Trade

Rudiger Dornbusch

NBER Working Paper No. 792 (Also Reprint No. r0621)
Issued in October 1981
NBER Program(s):   ITI   IFM

The paper sets out an overlapping generations model in an open economy context. In the absence of productive capital a real consol is the vehicle for intertemporal consumption smoothing. The presence of a long term asset implies that the anticipated future path of the economy, through the term structure of interest, affects current generations. The model is applied to issues in the closed and open economy. These include the effects of debt issue on asset prices and welfare, the effect of present or anticipated future income growth, permanent or transitory. In the open economy context we investigate the welfare and current account effects of income changes on debt issue. The role of international differences in risk aversion is studied.

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Document Object Identifier (DOI): 10.3386/w0792

Published: Dornbusch, Rudiger. "Intergenerational and International Trade." Journal of International Economics, Vol. 18, No. 1/2, (February 1985), pp. 123-139. citation courtesy of

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