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Is Home Bias in Assets Related to Home Bias in Goods?
van Wincoop, Eric - 2010
Obstfeld and Rogoff (2000) have reinvigorated an old literature on the link between home bias in the goods market and … home bias in the asset market by arguing that trade costs in the goods market can account for the observed portfolio home … the implied home bias are close to zero, casting significant doubt on a meaningful link between home bias in the goods and …
Persistent link: https://www.econbiz.de/10012760513
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Is Home Bias in Assets Related to Home Bias in Goods?
van Wincoop, Eric - 2006
Obstfeld and Rogoff (2000) have reinvigorated an old literature on the link between home bias in the goods market and … home bias in the asset market by arguing that trade costs in the goods market can account for the observed portfolio home … the implied home bias are close to zero, casting significant doubt on a meaningful link between home bias in the goods and …
Persistent link: https://www.econbiz.de/10012465932
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Foreign Direct Investment and the Equity Home Bias Puzzle
Blank, Sven - 2020
The vast macroeconomic literature trying to explain the widely observed equity home bias disregards internationally active firms. In a DSGE model that features the endogenous choice of firms to become internationally active through either exports or foreign direct investment (FDI), we find that...
Persistent link: https://www.econbiz.de/10012839673
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The home bias in equities and distribution costs
Harms, Philipp; Hoffmann, Mathias; Ortseifer, Christina - 2010
We show that including distribution costs into a general equilibrium model of international portfolio choice contributes to explaining the "home bias" in international equity investment. Our model is able to replicate observed investment positions for a wide range of parameter values, even if...
Persistent link: https://www.econbiz.de/10008758929
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The home bias in equities and distribution costs
Harms, Philipp; Hoffmann, Mathias; Ortseifer, Christina - 2010
We show that including distribution costs into a general equilibrium model of international portfolio choice contributes to explaining the “home bias” in international equity investment. Our model is able to replicate observed investment positions for a wide range of parameter values, even...
Persistent link: https://www.econbiz.de/10008779855
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The Home Bias in Equities and Distribution Costs
Harms, Philipp - 2016
We show that including distribution costs into a general equilibrium model of international portfolio choice contributes to explaining the 'home bias' in international equity investment. Our model is able to replicate observed investment positions for a wide range of parameter values, even if...
Persistent link: https://www.econbiz.de/10012991070
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Do Individual Behavioral Biases Affect Financial Markets and the Macroeconomy?
Bhamra, Harjoat Singh - 2017
A common criticism of behavioral economics is that it has not shown that the psychological biases of individual investors lead to aggregate long-run effects on both asset prices and macroeconomic quantities. Our objective is to address this criticism by providing a simple example of a production...
Persistent link: https://www.econbiz.de/10012966469
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Home Bias, Exchange Rate Disconnect, and Optimal Exchange Rate Policy
Wang, Jian - 2015
This paper examines how much the central bank should adjust the interest rate in response to real exchange rate fluctuations. The paper first demonstrates in a two-country Dynamic Stochastic General Equilibrium (DSGE) model, that the home bias in consumption is important to duplicate the...
Persistent link: https://www.econbiz.de/10012707889
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Cross-border portfolio diversification under trade linkages
Khalil, Makram - 2017
This study uncovers a cross-border financial diversification motive related to goods and services trade. Using the IMF … so to holdings of foreign equity. The empirical findings are in line with the predictions of a calibrated two-country two-goods …
Persistent link: https://www.econbiz.de/10011590598
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Corporate Debt, Capital Flows, and International Business Cycles
Trani, Tommaso - 2019
-good framework with portfolio choice and with credit market imperfections that lead firms to issue both equities and debt securities …
Persistent link: https://www.econbiz.de/10012898191