Front Matter Page
Research Department
Authorized for distribution by Simon Johnson
Contents
I. Introduction
II. An Open Economy Macro Model
A. Consumers
B. Firms
C. Monetary Authorities
D. The Menu of Assets
E. Goods Market Clearing
F. Foreign Economy
III. Solving the Model
A. Asset Market Solution
B. Linear Approximation to the Rest of the Model
C. Construction of the Equilibrium Portfolios
IV. Equilibrium Portfolios Under Alternative Asset Market Configurations
A. Optimal Portfolios
B. The NB Economy
C. The NBE Economy
D. Portfolio Holdings and Monetary Policy
V. Risk-Sharing and Portfolio Holdings
VI. Capital Flows and Exchange Rate Volatility
A. Exchange Rate Volatility
B. Capital Flows
C. More General Parameter Values
VII. Conclusion
Appendix I
Reference