Dynamic portfolio adjustment and capital controls: a Euler equation approach.

A multiasset dynamic portfolio balance model is developed based on the maximization of an intertemporal utility function in consumption when investors perform under uncertainty, quadratic adjustment costs, and capital market regulations. Portfolio data of the German private sector for the period 19...

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Publicado en:Southern Economic Journal Vol. 64; no. 4; pp. 902 - 922
Autores principales: Broer, D. Peter, Jansen, W. Jos
Formato: Artículo
Publicado: Southern Economic Association April 1998
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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      dt: April 1998
      vid: 64
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      pub: Southern Economic Association
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        atl: Dynamic portfolio adjustment and capital controls: a Euler equation approach.
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        au:
          Broer, D. Peter
          Jansen, W. Jos
      su:
        Euler theorem
        Portfolio management (Investments)
        Moments method (Statistics)
        Foreign investments
        Securities
        Germany (West)
      sug:
        subj:
          Germany (West)
          Euler theorem
          Portfolio management (Investments)
          Moments method (Statistics)
          Foreign investments
          Securities
      keyword:
        Investments, West German (Domestic)
        Portfolio theory
      ab: A multiasset dynamic portfolio balance model is developed based on the maximization of an intertemporal utility function in consumption when investors perform under uncertainty, quadratic adjustment costs, and capital market regulations. Portfolio data of the German private sector for the period 1975Q1-1990Q1 are used to estimate the model's structural parameters. The results show that asset demand is insensitive to return changes and that adjustment costs are low but highly significant, giving rise to moderate lags of adjustment. However, existing capital controls and adjustment costs cannot explain the observed “home bias” in the portfolio.
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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