Country Portfolio Dynamics

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  • 1 January 2007
    • preprint
      • Published in RePEc
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. (This abstract was borrowed from another version of this item.)

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