On Equilibrium States of an Open Economy with an Additional Redistribution of the Capital

The choice between private and government provision of a productive public good like infrastructure (public capital) is examined in the context of an endogenously growing open economy. The accumulation of public capital need not require government provision, in contrast to the standard assumption in the literature. Even with an efficient government, the relative costs and benefits of government and private provision depend crucially on the economy's underlying structural conditions and borrowing constraints in international capital markets. Countries with limited substitution possibilities and large production externalities may benefit from governments encouraging private provision of public capital through targeted investment subsidies. By contrast, countries with flexible substitution possibilities and relatively smaller externalities may benefit either from governments directly providing public capital or from regulation of private providers. The transitional dynamics also are shown to depend on the underlying elasticity of substitution and the size of the production externality.

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Macroeconomic Equilibrium Theory in the Context of Methodological Problems of Contemporary Economic Science

Voprosy Ekonomiki ◽

10.32609/0042-8736-2008-7-77-88 ◽

2008 ◽

pp. 77-88

Author(s):

M. Likhachev

Keyword(s):

Empirical Analysis ◽

Equilibrium States ◽

Equilibrium Theory ◽

Economic Systems ◽

Economic Science ◽

The Real ◽

Theoretical Status ◽

Methodological Problems ◽

Real Stability

The article is devoted to the analysis of methodological problems in using the conception of macroeconomic equilibrium in contemporary economics. The author considers theoretical status and relevance of equilibrium conception and discusses different areas and limits of applicability of the equilibrium theory. Special attention is paid to different epistemological criteria for this theory taking into account both empirical analysis of the real stability of economic systems and the problem of unobservability of equilibrium states.

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An approach to assessing the non-equilibrium States of regional economic systems

Multivariate statistical analysis, econometrics and simulation of real processes ◽

10.33276/978-5-8211-0786-2-122-123 ◽

2020 ◽

Author(s):

Natalya Roslyakova

Keyword(s):

Equilibrium States ◽

Economic Systems ◽

Regional Economic ◽

Non Equilibrium

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The long-run stability of a small, open economy under crawling peg regime

Acta Oeconomica ◽

10.1556/aoecon.52.2002.1.3 ◽

2002 ◽

Vol 52 (1) ◽

pp. 57-78

Author(s):

S. Çiftçioğlu

Keyword(s):

Exchange Rate ◽

Open Economy ◽

Risk Premium ◽

Small Open Economy ◽

Exchange Rate Policy ◽

Price Stability ◽

Output Stability ◽

Long Run ◽

The Exchange Rate ◽

The Impact

The paper analyses the long-run (steady-state) output and price stability of a small, open economy which adopts a “crawling-peg” type of exchange-rate regime in the presence of various kinds of random shocks. Analytical and simulation results suggest that with the exception of money demand shocks, an exchange rate policy which involves a relatively higher rate of indexation of the exchange rate to price level is likely to lead to the worsening of price stability for all types of shocks. On the other hand, the impact of adopting such a policy on output stability depends on the type of the shock; for policy shocks to the exchange rate and shocks to output demand, output stability is worsened whereas for the shocks to risk premium of domestic assets, supply price of domestic output and the wage rate, better output stability is achieved in the long run.

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