SHERP

The Dynamics of Price of Equity, Capital Accumulation and Current Account in an One-Good Optimizing Model

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Authors
Lee, Kiyoung
Issue Date
1993
Publisher
Seoul Journal of Economics
Citation
Seoul Journal of Economics 6 (No. 4 1993): 327-350
Keywords
the shadow priceinfinite-horizon settingadjustment costs
Abstract
This paper analyzes the effects of changes in fiscal policies or world interests on the dynamics of the price of equity, the level of capital accumulation and the current account for a small open economy in which the process of capital accumulation entails adjustment costs. It emphasizes the role of production technology as a determinant of the dynamics of the current account. Also the interactions among the price of equity, capital accumulation, And the current account are studied by using the fact that in the one good model with adjustment costs. the shadow price of installed capital can be interpreted as the price of equity with some innocuous assumptions.
ISSN
1225-0279
Language
English
URI
http://hdl.handle.net/10371/1026
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College of Social Sciences (사회과학대학)Institute of Economics Research (경제연구소)Seoul Journal of EconomicsSeoul Journal of Economics vol.06(4) (Winter 1993)
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