학술저널
An Interest Rate Shock and the Behavior of a Small Borrowing Economy
- 서울대학교 경제연구소
- Seoul Journal of Economics
- Seoul Journal of Economics Volume 3 No.3
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1990.09293 - 312 (19 pages)
- 0
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For those industrializing countries which borrow from abroad mainly for investment purposes, investment decision is not passive as predicted by the one-sector growth models. Using the Blanchard-Fischer model with installation costs of investment which separate investment decision from saving decision, we analyze the impacts of the world interest rate shock and show that a drop in the world interest rate cannot always be taken as a favorable shock to the small borrowing economy. While the lower interest rate increases the external debt due to active investment, it can increase or decrease consumption.
Abstract
Ⅰ. Introduction
Ⅱ. Model
Ⅲ. Competitive Equilibrium
Ⅳ. The Impacts of a Drop in the World Interest Rate
Ⅴ. Summary
References
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