The Effect of Restricting Asset Trade in Dynamic Equilibrium Models

Marc-Andre Letendre ()

Department of Economics Working Papers from McMaster University

Abstract: This paper shows that differences between the predictions of an international real business cycle model with complete markets and the predictions of a model where agentscan only trade rsk-free bonds depend heavily on the calibrated values for the degree of persistence in productivity shocks, the discount factor and the degree of international spillovers in productivity shocks. Since empirical work yields point estimates of the degrees of persistence and spillovers in productiv- ity shocks that bear large standard errors, the outcomes of quantitative studies using only the point estimates of these parameters inherit the substantial uncertainty associated with the empirical estimates.

Pages: 22 pages
Date: 2002-02
New Economics Papers: this item is included in nep-dge
References: Add references at CitEc
Citations:

Downloads: (external link)
http://socserv.mcmaster.ca/econ/rsrch/papers/archive/2002-02.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mcm:deptwp:2002-02

Access Statistics for this paper

More papers in Department of Economics Working Papers from McMaster University Contact information at EDIRC.
Bibliographic data for series maintained by ().