IDEAS home Printed from
   My bibliography  Save this paper

The Effect of Restricting Asset Trade in Dynamic Equilibrium Models


  • M-A. Letendre


This paper shows that differences between the predictions of an international real business cycle model with complete markets and the predictions of a model where agentscan only trade rsk-free bonds depend heavily on the calibrated values for the degree of persistence in productivity shocks, the discount factor and the degree of international spillovers in productivity shocks. Since empirical work yields point estimates of the degrees of persistence and spillovers in productiv- ity shocks that bear large standard errors, the outcomes of quantitative studies using only the point estimates of these parameters inherit the substantial uncertainty associated with the empirical estimates.

Suggested Citation

  • M-A. Letendre, 2002. "The Effect of Restricting Asset Trade in Dynamic Equilibrium Models," Department of Economics Working Papers 2002-02, McMaster University.
  • Handle: RePEc:mcm:deptwp:2002-02

    Download full text from publisher

    File URL:
    Download Restriction: no

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mcm:deptwp:2002-02. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.