The Risky Steady State
American Economic Review
vol. 101,
no. 3, May 2011
(pp. 398-401)
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.Citation
Coeurdacier, Nicolas, Hélène Rey, and Pablo Winant. 2011. "The Risky Steady State." American Economic Review, 101 (3): 398-401. DOI: 10.1257/aer.101.3.398JEL Classification
- E10 General Aggregative Models: General
- F41 Open Economy Macroeconomics