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Volume 2, No.
2,
August 2003
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Trade in Goods and Trade in
Assets
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Andre Burgstalle
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Department of Economics, Barnard College, Columbia
University, U.S.A.
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Cem Karayalcin*
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Department
of Economics, Florida International University, U.S.A.
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Abstract
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A two-good, two-country intertemporal
general equilibrium model of pure exchange is
presented, in which whatever causes intertemporal
trade also causes intertemporal trade, so that
simple textbook separability fails. The framework
allows financial market phenomena such as
international yield arbitrage, portfolio composition
shifts, and capital-flow-financed current account
deficits to interact dynamically with the real
phenomena of pure exchange.
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Key words
:
intratemporal
trade, intertemporal trade
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JEL classification
: F3
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