EconStor >
Goethe-Universität Frankfurt am Main >
Center for Financial Studies (CFS), Universität Frankfurt a. M.  >
CFS Working Paper Series, Universität Frankfurt a. M. >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/43247
  
Title:A tractable model of precautionary reserves, net foreign assets, or sovereign wealth funds PDF Logo
Authors:Carroll, Christopher D.
Jeanne, Olivier
Issue Date:2009
Series/Report no.:CFS Working Paper 2009/15
Abstract:We model the motives for residents of a country to hold foreign assets, including the precautionary motive that has been omitted from much previous literature as intractable. Our model captures many of the principal insights from the existing specialized literature on the precautionary motive, deriving a convenient formula for the economy's target value of assets. The target is the level of assets that balances impatience, prudence, risk, intertemporal substitution, and the rate of return. We use the model to shed light on two topical questions: The 'upstream' flows of capital from developing countries to advanced countries, and the long-run impact of resorbing global financial imbalances.
Subjects:Buffer Stock Saving
Net Foreign Assets
Sovereign Wealth Funds
Foreign Exchange Reserves
Small Open Economy Models
JEL:C61
Persistent Identifier of the first edition:urn:nbn:de:hebis:30-68346
Document Type:Working Paper
Appears in Collections:CFS Working Paper Series, Universität Frankfurt a. M.

Files in This Item:
File Description SizeFormat
606244395.pdf425.17 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/43247

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.