The Risky Steady State
Nicolas Coeurdacier, Hélène Rey, Pablo Winant
American Economic Review · 2011 · Volume 101 · Issue 3
Abstract
We propose a simple quantitative method to linearize around the risky steady state of a small open economy. Unlike when the deterministic steady state is used, the net foreign asset position is well defined. We allow for stochastic income and stochastic interest rate.
Keywords
General Aggregative Models: General, Open Economy Macroeconomics
Enable JavaScript for citation tools and additional paper interactions.