Equilibrium existence in the international asset and good markets
AbstractThe international asset pricing models are mostly developed in the case of parity failure (investors of di?erent countries do not agree on the expected returns on securities). In this case, an equilibrium in the international asset markets may exist, but not in the international good markets. In our paper, we prove the existence of an equilibrium in both the asset and the good markets. We focus also on the links between parities, no-arbitrage conditions and the general equilibrium. We show that no-arbitrage conditions for international asset and good markets are necessary and sufficient to an equilibrium in both the markets.
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Bibliographic InfoPaper provided by Development and Policies Research Center (DEPOCEN), Vietnam in its series Working Papers with number 16.
Length: 26 pages
Date of creation: 2013
Date of revision:
International asset pricing; Returns on securities; Exchange rates; No-arbitrage conditions; PPP; UIRP; General equilibrium;
Find related papers by JEL classification:
- D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets
- F31 - International Economics - - International Finance - - - Foreign Exchange
- G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
- G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
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