Journal Article
The macroeconomic effects of world trade in financial assets
Abstract: This article analyzes some of the potential effects of increased international financial integration within a simple two-country model. In the model, the article considers a switch in the menu of internationally traded financial securities from bonds to complete contingent claims and examines the impact of this switch on the stochastic properties, including the cross-country correlations, of standard macroeconomic aggregates like output, consumption, and labor effort, as well as the trade balance.
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Bibliographic Information
Provider: Federal Reserve Bank of Minneapolis
Part of Series: Quarterly Review
Publication Date: 1993
Volume: 17
Issue: Sum
Pages: 12-21