Financial Super-Markets: Size Matters for Asset Trade
Philippe Martin and
Helene Rey
International Finance from University Library of Munich, Germany
Abstract:
This paper presents a new theoretical framework to analyze=20 financial markets in an international context. We build a two-country=20 macroeconomic model in which agents are risk averse, assets are imperfect=20 substitutes, the number of financial assets is endogenous, and cross-border= =20 asset trade entails transaction costs. We show that demand effects have=20 important implications for the link between market size, asset prices and=20 financial market development. These effects are consistent with the=20 existing empirical evidence. Due to co-ordination failures, the extent of=20 financial market incompleteness is inefficiently high. We also analyze the= =20 impact of domestic transaction costs and issuing costs on financial markets= =20 and returns.
JEL-codes: F12 F4 G1 G12 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2001-02-09
New Economics Papers: this item is included in nep-fmk
Note: 28 pages, Acrobat .pdf
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)
Downloads: (external link)
https://econwpa.ub.uni-muenchen.de/econ-wp/if/papers/0012/0012001.pdf (application/pdf)
Related works:
Journal Article: Financial super-markets: size matters for asset trade (2004) 
Working Paper: Financial Super-Markets: Size Matters for Asset Trade (2004)
Working Paper: Financial super-markets: size matters for asset trade (2004)
Working Paper: Financial Super-Markets: Size Matters for Asset Trade (2004)
Working Paper: Financial Super-Markets: Size Matters for Asset Trade (2001) 
Working Paper: Financial Super-Markets: Size Matters for Asset Trade (2000) 
Working Paper: Financial Super-Markets: Size Matters for Asset Trade (2000) 
Working Paper: Financial super-markets: size matters for asset trade (2000) 
Working Paper: Financial Super-Markets: Size Matters for Asset Trade (2000) 
Working Paper: Financial Super-Markets: Size Matters for Asset Trade (1999) 
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:wpa:wuwpif:0012001
Access Statistics for this paper
More papers in International Finance from University Library of Munich, Germany
Bibliographic data for series maintained by EconWPA (volker.schallehn@ub.uni-muenchen.de this e-mail address is bad, please contact repec@repec.org).