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Global Imbalances with Safe Assets in Eurozone

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  • Ly Dai Hung

    (Vietnam Institute of Economics, Hanoi, Vietnam)

Abstract

In one open two-country economy, a higher domestic productivity level raises both mean and variance of wealth dynamic, and can lead to a greater accumulation of safe assets. The empirical evidences on the 19 countries of Eurozone confirm that the safe assets exchange supports the international risk-sharing across countries. Moreover, in comparison with the risky investments (FDI and Portfolio Equities), the safe assets (Bonds) are the dominant driver of global imbalances within Eurozone.

Suggested Citation

  • Ly Dai Hung, 2018. "Global Imbalances with Safe Assets in Eurozone," Working Papers hal-01935158, HAL.
    • Handle: RePEc:hal:wpaper:hal-01935158
    Note: View the original document on HAL open archive server: https://hal.science/hal-01935158
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    References listed on IDEAS

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    Keywords

    Current Account; Endogenous Portfolio Choice; Safe Assets; Produc-tivity Level;
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