Debt and capital accumulation in a two-sector model with non-traded goods

Oded Hochman, Assaf Razin

Research output: Contribution to journalArticlepeer-review

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 languageEnglish
Pages (from-to)165-180
Number of pages16
JournalEuropean Economic Review
Volume8
Issue number2
DOIs
StatePublished - 1 Jan 1976
Externally publishedYes

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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