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International Robust Disagreement

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Abstract:

We characterize the equilibrium of a two-country, two-good economy in which agents have opposite preference bias toward one of the two consumption goods and fear model misspecification. We document that disagreement about endowments' growth prospects is a persistent endogenous outcome of this class of economies.

Document Type: Research Article

DOI: http://dx.doi.org/10.1257/aer.102.3.152

Publication date: May 1, 2012

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