Portfolio autarky: A welfare analysis

John Kareken, Neil Wallace

Research output: Contribution to journalArticlepeer-review

17 Scopus citations


A variant of the standard Heckscher-Ohlin model, a model of a two-country world economy populated by Samuelsonian overlapping generations, is presented and then used in a welfare analysis of two international economic policy regimes: A laissez-faire regime, characterized by free trade in goods and complete freedom of portfolio choice; and a portfolio autarky regime, characterized by free trade in goods and a prohibition, applicable world-wide, on the ownership of foreign assets (land). Using a 'growth model' version of the traditional welfare criterion, it is shown that the laissez-faire regime is optimal and that the portfolio autarky regime is not.

Original languageEnglish (US)
Pages (from-to)19-43
Number of pages25
JournalJournal of International Economics
Issue number1
StatePublished - Feb 1977

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics


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