Dynamic Three-Factor Models of International Trade
نویسندگان
چکیده
Based on the Jones (1971) model, we construct two dynamic models of international trade in which the rate of time preference is either constant or time-varying. The main purpose is to study whether and under what conditions the results derived from the Jones model still hold in the dynamic framework. It is shown that the results of dynamic models may be similar or different to those obtained in the static model. For example, it is possible that, in both static and dynamic models, an increase in a commodity price raises this commodity’s output and the rate of return to the specific factor in this sector. However, the effect on the wage rate may be different due to the factor accumulation impact in the dynamic framework. JEL Classification: D90, F11
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