CFDP 771

International Lending and Borrowing in a Stochastic Sequence Equilibrium

Author(s): 

Publication Date: May 1985

Pages: 32

Abstract: 

The objective of this paper is to study international lending and borrowing in general equilibrium framework in which countries are subject to stochastic productivity fluctuations. The role of time preference, borrowing limits, and lump sum taxation are rigorously analyzed, yielding results which enrich those obtained in the existing literature.

Keywords: 

International lending and borrowing, Stochastic productivity fluctuations

JEL Classification Codes:  441, 431