Bussière, Matthieu; Chortareas, Georgios E.; Driver, … - 2005
foreign asset position, so that agents invest abroad any savings generated by a positive income shock. On the other hand, a …' portfolios. If investment risk is high and diminishing returns are weak, then savings from temporary income shocks may, in fact … temporary shock. We estimate a model that explicitly allows for the possibility that the impact of initial portfolio allocation …