The Risky Steady State
- (pp. 398-401)
AbstractWe 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.
CitationCoeurdacier, Nicolas, Hélène Rey, and Pablo Winant. 2011. "The Risky Steady State." American Economic Review, 101 (3): 398-401. DOI: 10.1257/aer.101.3.398
- E10 General Aggregative Models: General
- F41 Open Economy Macroeconomics