Equilibrium existence in the international asset and good markets

Stefano Bosi, Patrice Fontaine and Cuong Le van
Additional contact information
Stefano Bosi: EPEE, University of Evry
Patrice Fontaine: Euro?dai, CERAG, University Pierre-Mendes-France, Grenoble

No 16, Working Papers from Development and Policies Research Center (DEPOCEN), Vietnam

Abstract: The international asset pricing models are mostly developed in the case of parity failure (investors of di?erent countries do not agree on the expected returns on securities). In this case, an equilibrium in the international asset markets may exist, but not in the international good markets. In our paper, we prove the existence of an equilibrium in both the asset and the good markets. We focus also on the links between parities, no-arbitrage conditions and the general equilibrium. We show that no-arbitrage conditions for international asset and good markets are necessary and sufficient to an equilibrium in both the markets.

Keywords: International asset pricing; Returns on securities; Exchange rates; No-arbitrage conditions; PPP; UIRP; General equilibrium (search for similar items in EconPapers)
JEL-codes: D53 F31 G11 G15 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2013
New Economics Papers: this item is included in nep-opm
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Citations: View citations in EconPapers (2)

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Working Paper: Equilibrium existence in the international asset and good markets (2013)
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