Solving for Country Portfolios in Open Economy Macro Models

Michael B. Devereux () and Alan Sutherland ()

No 07/284, IMF Working Papers from International Monetary Fund

Abstract: This paper presents a general approximation method for characterizing time-varying equilibrium portfolios in a two-country dynamic general equilibrium model. the method can be easily adapted to most dynamic general equilibrium models, it applies to environments in which markets are complete or incomplete, and it can be used for models of any dimension. Moreover, the approximation provides simple, easily interpretable closed form solutions for the dynamics of equilibrium portfolios.

Keywords: Payments imbalances; Markets; Trade; Bonds (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-dge, nep-int and nep-mac
Date: 2007-12-19
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Related works:
Working Paper: Solving for Country Portfolios in Open Economy Macro Models (2006)
Working Paper: Solving for Country Portfolios in Open Economy Macro Models (2007)
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