Journal of Monetary Economics2013-09-05 2:57 AM

Discussion of “Capital mobility and international sharing of cyclical risk”

Highlights • A comment on “Capital mobility and international risk sharing of cyclical risk.” Investors hold large gross positions that vary in value over the business cycle. • It is hard to separate portfolio adjustment costs from trade costs. • A reconciliation with adjustment costs requires further research. Abstract This is a comment on “Capital mobility and international sharing of cyclical risk.” The comment focuses on the authors' choice of portfolio adjustment costs in explaining limited international risk sharing. The comment raises two main issues. One is that investors hold large gross positions that vary significantly in value over the business cycle. The second is that it is difficult to identify portfolio adjustment costs from trade costs within the authors' environment.

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Journal of Monetary Economics

The Journal of Monetary Economics is a peer-reviewed academic journal covering research on macroeconomics and monetary economics. It is published by Elsevier and was established in October 1973 by Karl Brunner and Charles I. Plosser.

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