TY - JOUR
T1 - Endogenous inequality and fluctuations in a two-country model
AU - Kikuchi, Tomoo
AU - Stachurski, John
PY - 2009/7
Y1 - 2009/7
N2 - We study a two-country version of Matsuyama's [K. Matsuyama, Financial market globalization, symmetry-breaking, and endogenous inequality of nations, Econometrica 72 (2004) 853-884] world economy model. As in Matsuyama's model, symmetry-breaking can be observed, and symmetry-breaking generates endogenously determined levels of inequality. In addition, we show that when the countries differ in population size, their interaction through credit markets may lead to persistent endogenous fluctuations.
AB - We study a two-country version of Matsuyama's [K. Matsuyama, Financial market globalization, symmetry-breaking, and endogenous inequality of nations, Econometrica 72 (2004) 853-884] world economy model. As in Matsuyama's model, symmetry-breaking can be observed, and symmetry-breaking generates endogenously determined levels of inequality. In addition, we show that when the countries differ in population size, their interaction through credit markets may lead to persistent endogenous fluctuations.
KW - Credit market imperfection
KW - Endogenous cycles
KW - Symmetry-breaking
KW - Two-country model
UR - http://www.scopus.com/inward/record.url?scp=67649353270&partnerID=8YFLogxK
U2 - 10.1016/j.jet.2009.01.001
DO - 10.1016/j.jet.2009.01.001
M3 - Article
SN - 0022-0531
VL - 144
SP - 1560
EP - 1571
JO - Journal of Economic Theory
JF - Journal of Economic Theory
IS - 4
ER -