International cross-holdings of bonds in a two-good DSGE model

David Amdur

Economics Letters, 2010, vol. 108, issue 2, 163-166

Abstract: I solve for equilibrium portfolios in a two-country, two-good dynamic stochastic general equilibrium (DSGE) model where the only traded assets are locally-denominated real bonds. Unless the elasticity of substitution between goods is exceptionally low, the model predicts that each country will hold a short position in foreign bonds.

Keywords: International; diversification; Portfolio; choice; Open; economy; macroeconomics; DSGE; models (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:108:y:2010:i:2:p:163-166

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