JOURNAL ARTICLE
Cite JOURNAL ARTICLE
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Dienstleistungssektor und Leistungsbilanzsaldo
Journal of Contextual Economics – Schmollers Jahrbuch, Vol. 110 (1990), Iss. 3 : pp. 381–392
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Article Details
Rübel, Gerhard
Abstract
Using a two country model, it is shown that a relatively large increase in demand for services in country 1 affects both countries' current account balances. The reactions of these balances depend on factor mobility and on the 'non-tradeable' and 'laborintensive' characteristics of services. International factor immobility will cause a current account deficit in country 1 in period 1 because of a stronger preference for the non-tradeable good, while international capital mobility will cause a current account surplus because of an increased demand for the relatively labor-intensive product.