GTAP Resources: Resource Display
| GTAP Resource #7221 |
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"An investment determination mechanism with segmented capital markets" by Cui, Hao (David) and Zuzana Smeets Kristkova Abstract In the standard GTAP model, regional investment is allocated via a global bank under which either the expected rate of return is equalized across regions or the net investment growth rate is equalized across regions. In a typical CGE baseline with long term recursive dynamics, this paper shows that this global bank approach can lead to unrealistic investment growth and volatile current accounts (i.e., trade balances) projections even in major economies. To tackle these issues, this paper introduces a segmented capital markets approach where regional investment comes from not only the global/international bank but also domestic banks such that regional investment and savings are well connected. The paper shows that the proposed approach leads to well-controlled investment growth and trade balance developments. |
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- Model extension/development - Partial and general equilibrium models - Not Applicable |
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Public Access  Paper (414.7 KB) Replicated: 0 time(s)Restricted Access No documents have been attached. Special Instructions No instructions have been specified. |
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Last Modified: 9/15/2023 2:05:45 PM
