The past decade has witnessed an increase in the fraction of equity portfolios invested abroad, as barriers to international asset trade have significantly declined. What are the long-run implications of this process? In this paper we investigate to what extent nontradables (consumption and leisure) can affect the portfolio allocation decision in otherwise integrated capital markets. We find that hedging against nontradables shocks can account for only a small portfolio bias towards domestic assets. These results suggest that in the near future we can expect to observe sizable additional international diversification.
Download Info
To our knowledge, this item is not available for
download. To find whether it is available, there are three
options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page
whether it is in fact available.
3. Perform a search for a similarly titled item that would be
available.
Volume (Year): 34 (2002) Issue (Month): 1 (February) Pages: 25-50 Download reference. The following formats are available: HTML
(with abstract),
plain text
(with abstract),
BibTeX,
RIS (EndNote, RefMan, ProCite),
ReDIF
For technical questions regarding this item, or to correct its listing, contact: (Christopher F. Baum).
Related research
Keywords:
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)