Net foreign asset position and consumption dynamics in the international economy
By: prepared by Fabio Ghironi, Talan B. İşcan, and Alessandro Rebucci.
Contributors: İşcan, Talan Behçet, 1966-; Rebucci, Alessandro.; International Monetary Fund. Research Dept.
Series: IMF working paper -- WP/05/82
Publisher: International Monetary Fund, Research Dept.
Published: 2005
Place of publication: Washington, D.C
Language: eng
Number of pages: 33
Subjects: Alien property -- Econometric models.; Consumption (Economics) -- Econometric models.; Production (Economic theory) -- Econometric models.
Description: We examine the effect of non-zero, long-run foreign asset positions on consumption dynamics in response to productivity shocks in a two-country, dynamic, general equilibrium model, with different discount factors across countries populated by overlapping generations of households. We then compare the model results to those of a VAR for the United States versus the rest of the G-7. In the data, we find that permanent worldwide productivity shocks lead to net foreign asset and consumption dynamics that are consistent with interpreting the United States as the impatient economy in our model and are not consistent with symmetric models with equal discount factors.
Notes: "April 2005."

Includes bibliographical references (p. 26-28).

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