Arbeitspapier

Country Size, Specialization Patterns and Secular Demand Stagnation

Using a dynamic two-country two-commodity Ricardian model where preference for money (or wealth) leads to aggregate demand deficiency, this paper examines the relationship between the two countries’ relative population size and their specialization patterns, employment and consumption. When the countries have similar population sizes, they specialize in respective commodities with comparative advantage. In this case a larger foreign, or a smaller home, population raises the relative price of the home commodity. It raises home real income and consumption per capita if full employment prevails in the home country. If unemployment appears, however, home employment and consumption per capita decrease.

Language
Englisch

Bibliographic citation
Series: CESifo Working Paper ; No. 6752

Classification
Wirtschaft
Open Economy Macroeconomics
Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
Business Fluctuations; Cycles
Subject
secular demand stagnation
liquidity trap
unemployment
population
specialization pattern

Event
Geistige Schöpfung
(who)
Ono, Yoshiyasu
Event
Veröffentlichung
(who)
Center for Economic Studies and ifo Institute (CESifo)
(where)
Munich
(when)
2017

Handle
Last update
10.03.2025, 11:44 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Ono, Yoshiyasu
  • Center for Economic Studies and ifo Institute (CESifo)

Time of origin

  • 2017

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