The composition effect of the current account in small open economies
Date
2019?
Authors
Aquino, Juan Carlos
relationships.isContributorOfPublication
Kawamura, Enrique
Journal Title
Journal ISSN
Volume Title
Publisher
Universidad de San Andrés. Departamento de Economía
Abstract
A common problem in international finance consists of the indeterminacy of the equilibrium asset portfolio in small open economy models. This paper develops a simple approach to compute this portfolio under the assumption of incomplete nancial markets. The procedure involves the limiting allocation of a class of two-country world economies where the relative size of one of them tends to zero. Such approach allows to identify the e ect of portfolio decisions on the dynamics of the net foreign asset position of a small open economy in a structural fashion. As an illustration, an approximated closed-form solution is obtained for a highly stylized model that is isomorphic to the class of Dynamic Stochastic General Equilibrium (DSGE) models typically used in the literature.
Description
Fil: Aquino, Juan Carlos. Universidad de San Andrés. Departamento de Economía; Argentina.
Keywords
Citation
Aquino, J. C. (2019). The composition effect of the current account in small open economies. [Tesis de maestría, Universidad de San Andrés. Departamento de Economía]. Repositorio Digital San Andrés. http://hdl.handle.net/10908/17061