We are happy to invite you to the research seminar by the Center for Economic Expertise. On April 25th Guillermo Hausmann Guil will present the topic „Solving open economy models with incomplete markets by perturbation“ in 417 room and MS Teams.
Brief overview of the seminar
This paper proposes to solve open economy models with incomplete markets by first approximating the local dynamics of a tractable auxiliary model, and then applying regular perturbation to some of the parameters to reach the model of interest. The method is easy to implement with available solution packages, and can approximate models around a large subset of the state-space, including the stochastic steady-state. The lead application extends the two-period, multi-asset model of Coeurdacier and Gourinchas (2016, JME) to an infinite horizon setup. The calibrated model with bonds and equities delivers a large level of equity home bias, and a natural link between trade and financial openness with external asset positions comparable to the data. On the downside, the model generates excessive risk-sharing, and counterfactual co-movements of gross capital flows.
Information on the seminar
- Time: April 25, 14:00-15:00
- Venue: Faculty of Economics and Business Administration, Vilnius University, Saulėtekio al. 9, Vilnius, 417 room and MS Teams Click here
- Presenter: Guillermo Hausmann Guil, Research Fellow at Center for Economic Expertise
- Topic: „Solving open economy models with incomplete markets by perturbation“
- Working language: English
The seminar is open to all - students, teachers, researchers. We invite you to learn more!