Abstract
The paper examines optimal debt and capital accumulation for an open economy which faces an imperfect international capital market. The major finding is that the optimal pattern of debt and capital accumulation is affected by relative factor intensities. Factor intensities determine whether substitution or complementary relationships exist between debt and capital. The relationship between the country's net wealth and its two components financial and productive are also determined by factor intensities.
Original language | English |
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Pages (from-to) | 165-180 |
Number of pages | 16 |
Journal | European Economic Review |
Volume | 8 |
Issue number | 2 |
DOIs | |
State | Published - 1 Jan 1976 |
Externally published | Yes |
ASJC Scopus subject areas
- Finance
- Economics and Econometrics