Portfolio substitution and exchange rate volatility

Article Abstract:

The effects of frictions such as legal and institutional changes can facilitate easier adjustments on foreign exchange portfolios, producing concerns that exchange rates may become more unstable. An equilibrium model with alternate degrees of portfolio substitutability is presented to analyze the effects of frictions. Results indicate that exchange rate volatility increases as portfolios become more substitutable when preferences are nearly log linear or when transaction costs are minimum. However, volatility is not significantly affected by substitutability in the presence of empirically reasonable parameter values.

Research, Models, Foreign exchange, Financial markets, Equilibrium (Economics)

---

Intergenerational earnings mobility, inequality and growth

Article Abstract:

A model was analyzed to determine the relationship of per capita income, inequality, intergenerational mobility and education returns. The model revealed the likelihood of multiple equilibria in which two economies end up with different steady states. Such condition results due to variation in initial wealth distribution despite similarity in technology parameters and taste.

Analysis, Economic research, Cost and standard of living, Cost of living, Human capital

---

Similar abstracts:

• Abstracts: Foreign exchange market efficiency and structural instability: evidence from Taiwan. part 2 Partisan profiles in presidential policies: methodological issues and empirical evidence reconsidered
• Abstracts: Superexogeneity and the dynamic linkages among international equity markets. Stock returns and volatility in emerging financial markets
• Abstracts: A characterization of the price behavior of international dual stocks: an error correction approach. Consumption-based versus production-based models of international equity markets
• Abstracts: The economics and politics of regulation. Interpreting the Korean crisis: financial liberalisation, industrial policy and corporate governance
• Abstracts: Towards one Southeast Asia. ASEAN and the theory of regional economic integration: a survey. Economic co-operation after 30 years of ASEAN

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.