RIEB Discussion Paper Series No.2020-10

RIEB Discussion Paper Series No.2020-10

Title

Time Preference and International Trade

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.

Keywords

Time preference; Consumption externality; Two-country model; Heckscher-Ohlin

JEL Classification

E13, E21, F11, F43

Inquiries

Kazuo NISHIMURA
Research Institute for Economics and Business Administration
Kobe University
Rokkodai-cho, Nada-ku, Kobe
657-8501 Japan
Phone: +81-78-803-7036
FAX: +81-78-803-7059

Kazumichi IWASA
Research Institute for Economics and Business Administration
Kobe University
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