Deviating from conventional models in financial economics which maintain that markets are perfectly informed, more recent work has relied on the role of private information to explain observed portfolio choices or their impact on market outcomes in financial and currency markets (see, e.g.,...

By allowing for imperfectly informed markets and the role of private information, we offer new insights about observed deviations of portfolio concentrations in domestic relative to foreign risky assets, or "home bias", from what standard finance models predict. Our model ascribes the "bias" to...

By allowing for imperfectly informed markets and the role of private information, we offer new insights about observed deviations of portfolio concentrations in domestic relative to foreign risky assets, or "home bias", from what standard finance models predict. Our model ascribes the "bias" to...

By allowing for imperfectly informed markets and the role of private information, we offer new insights about observed deviations of portfolio concentrations in domestic relative to foreign risky assets, or "home bias", from what standard finance models predict. Our model ascribes the "bias" to...

We study regime shifts demand for pure liquidity. Building on a simplistic overlapping generations model with exchange economy, we demonstrate that there exists different types of equilibrium regimes in which the demand for liquidity or rational bubbles is (1) stable and high (2) stable and low,...

By allowing for imperfectly informed markets but optimal private information acquisition, we offer new insights about observed variations in portfolio con- centrations in domestic versus foreign risky assets, or “home bias,” and the degree to which home asset prices are “information...