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
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Englisch
- Bibliographic citation
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Series: CESifo Working Paper ; No. 6752
- Classification
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Wirtschaft
Open Economy Macroeconomics
Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
Business Fluctuations; Cycles
- Subject
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secular demand stagnation
liquidity trap
unemployment
population
specialization pattern
- Event
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Geistige Schöpfung
- (who)
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Ono, Yoshiyasu
- Event
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Veröffentlichung
- (who)
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Center for Economic Studies and ifo Institute (CESifo)
- (where)
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Munich
- (when)
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2017
- Handle
- Last update
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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