By using a two-country model with habit-forming consumers, this paper shows that the transfer paradox can take place in the free-trade, dynamically-stable world economy. When the debtor is more habituated to consumption than the creditor, an income transfer from the creditor to the debtor raises...

We examine and verify our hypothesis from a theoretical model that parents are more likely to be authoritative if they are from a wealthy family. Using the data from the Preference Parameters Study of Osaka University, Japan, we find that there are significantly positive associations between...

We examine stability of competitive equilibrium in an N-country world economy with capital accumulation, where each country can have either increasing marginal impatience (IMI) or decreasing marginal impatience (DMI). The necessary and sufficient condition for stability is shown as positive...

In a two-country model with habit formation, we focus on interdependent macroeconomic adjustments to global and country-specific income shocks.Global habits and habit differentials play key roles in the global equilibrium dynamics, possibly nonmonotonic, and in the determination of international...

This research is the first to examine dynamic general equilibrium in a growing two-country economy under decreasing marginal impatience (DMI). The stability condition is shown to be more restrictive than in the case of an endowment economy and/or under increasing marginal impatience (IMI). By...