Monopoly Wealth and International Debt / Jonathan Eaton.

Format:

Book

Author/Creator:

Eaton, Jonathan.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w2485.

NBER working paper series no. w2485

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1988.

Summary:

When rents generated by government policies are perceived as permanent, the rights to earn them may be capitalized as assets that form a component of nonhuman wealth. The existence of such assets raises international indebtedness, while shifts in policy that increase or reduce the importance of such rents can generate movements in the current account that are correlated with the real exchange rate. Because the elimination of policies that generate rents imposes a capital loss that Is born entirely by generations currently alive, while the benefit of the removal of a distortion is shared between those alive and unborn generations, a possibility is that such a reform can reduce the expected lifetime welfare of everyone alive. If monopoly exists in the provision of nontraded goods then there may be several steady states that can be Pareto ranked.

Notes:

Print version record

1988.