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- W2786604313 abstract "We study optimal portfolio choice in a two-country model where assets represent claims on future consumption and facilitate trade in markets with imperfect credit. Assuming that foreign assets trade at a cost, agents hold relatively more domestic assets. Consequently, agents have larger claims to domestic over foreign consumption. Moreover, foreign assets turn over faster than domestic assets because the former have desirable liquidity properties, but represent inferior saving tools. Our mechanism offers an answer to a long-standing puzzle in international finance: a positive relationship between consumption and asset home bias coupled with higher turnover rates of foreign over domestic assets." @default.
- W2786604313 created "2018-02-23" @default.
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- W2786604313 date "2014-05-01" @default.
- W2786604313 modified "2023-10-07" @default.
- W2786604313 title "Asset liquidity and international portfolio choice" @default.
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- W2786604313 doi "https://doi.org/10.1016/j.jet.2014.01.004" @default.
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