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Autor(in)
Valente, Simone
Datum
2006-07-19Typ
- Working Paper
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Abstract
This paper analyzes a two-country model with international status seeking: utility in the status-seeking country is affected by consumption gaps with the status leader. The analysis employs the benchmark neoclassical growth model of trade, with asymmetric endowments and heterogeneous goods. In this setup, transboundary envy reshapes consumption behaviour and modifies transitional dynamics. It is shown that the status-seeker experiences consumption overshooting: consumption per capita grows beyond the long-run equilibrium level, and approaches the steady-state from above. Terms-of-trade dynamics become non-monotonic, and there always exist a critical interval of time during which envy reverts the growth differential in favor of the initially poor country Mehr anzeigen
Persistenter Link
https://doi.org/10.3929/ethz-a-005229410Publikationsstatus
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Zeitschrift / Serie
Economics Working Paper SeriesBand
Verlag
ETH, Eidgenössische Technische Hochschule Zürich, WIF, Institute of Economic ResearchThema
two-country models; Consumption externalities; international tradeOrganisationseinheit
03635 - Bretschger, Lucas02045 - Departement Geistes-, Sozial- und Staatswissenschaften / Department of Humanities, Social and Political Sciences
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