Portfolio autarky: A welfare analysis

John Kareken; Neil Wallace

doi:10.1016/0022-1996(77)90003-4

Portfolio autarky: A welfare analysis

John Kareken
, Neil Wallace

Economics

Research output: Contribution to journal › Article › peer-review

18 Scopus citations

Abstract

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 language	English (US)
Pages (from-to)	19-43
Number of pages	25
Journal	Journal of International Economics
Volume	7
Issue number	1
DOIs	https://doi.org/10.1016/0022-1996(77)90003-4
State	Published - Feb 1977

All Science Journal Classification (ASJC) codes

Finance
Economics and Econometrics

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10.1016/0022-1996(77)90003-4

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title = "Portfolio autarky: A welfare analysis",

abstract = "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.",

author = "John Kareken and Neil Wallace",

note = "Funding Information: *The Federal Reserve Bank of Minneapolis, with which the authors are associated, endorse neither their analysis ncx their conclusions. They are, however, indebted to the Bank for its financial support of their research and to several of their University of Minnesota colleagues for helpful comments.",

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N1 - Funding Information: *The Federal Reserve Bank of Minneapolis, with which the authors are associated, endorse neither their analysis ncx their conclusions. They are, however, indebted to the Bank for its financial support of their research and to several of their University of Minnesota colleagues for helpful comments.

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N2 - 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.

AB - 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.

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Portfolio autarky: A welfare analysis

Abstract

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