A micro-founded Kaldor-Pasinetti model considering an open economy: An inter-generational cum life-cycle approach

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 2024-03, Vol.77 (308), p.89
Main Authors: João Gabriel de Araujo Oliveira, Vieira, Beatriz Estulano, Renato Nozaki Sugahara
Format: Article
Language:English
Subjects:
Accumulation
Capital
Capital formation
Exports
Government
Government revenue
Imports
Income distribution
Inheritance
International trade
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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