Ghironi, Fabio; Iscan, Talan B.; Rebucci, Alessandro - In: Journal of International Money and Finance 27 (2008) 8, pp. 1337-1359
We examine the effect of non-zero, steady-state foreign assets on consumption dynamics in response to productivity shocks in a two-country, dynamic, general equilibrium model. The model generates non-zero steady-state net foreign assets by allowing for different discount factors across...