A micro-founded Kaldor-Pasinetti model considering an open economy

A micro-founded Kaldor-Pasinetti model considering an open economy

This paper expands Baranzini’s (1991) approach by introducing the assumption of an open economy to a model of capital accumulation in an intergenerational framework. Our results show the importance of government activity and foreign trade interrelations in determining the path of the income distribu...

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Bibliographic Details
Published in:PSL quarterly review Vol. 77; no. 308
Main Authors: João Gabriel de Araujo Oliveira, Beatriz Estulano Vieira, Renato Nozaki Sugahara
Format: Journal Article
Language:English
Published: Associazione Economia civile 01-04-2024
Subjects:
Capital Accumulation
Income Distribution
Open Economy
Stability Conditions
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Summary:This paper expands Baranzini’s (1991) approach by introducing the assumption of an open economy to a model of capital accumulation in an intergenerational framework. Our results show the importance of government activity and foreign trade interrelations in determining the path of the income distribution and growth processes. Government revenue derives from inheritance taxation, which is used as income transfers. Exports affect capital accumulation negatively, and the inverse result for imports is true. Moreover, the government does not have to incentivize exports; otherwise, capital accumulation will be harmed. Thus, both assumptions influence the determination of the income distribution and growth processes.
ISSN:2037-3635
2037-3643
DOI:10.13133/2037-3643/18148