Summary
A model of portfolio behaviour is developed, based on the assumption that the distribution of a portfolio over different countries is determined by the general level of returns and costs of investments in those countries. From the model an isocapital exports line is derived. With the help of this line it is shown under which circumstances ‘perverse’ capital movements will occur. The model implies that only temporary compensating operations on the domestic money and capital markets may be sufficient to make a domestic monetary policy effective.
A partial adjustment version of the model is estimated for company pension funds.
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De heer M. J. Broekhuisen, evenals de auteur werkzaam op de sectie wetenschappelijk onderzoek en econometrie van de Studiedienst van de Nederlandsche Bank N.V., is mij op voortreffelijke wijze behulpzaam geweest bij de berekeningen voor dit onderzoek. De verantwoordelijkheid voor eventuele tekortkomingen is echter volledig de mijne. In een bijlage wordt de betekenis van de gebruikte symbolen samengevat.
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Koning, J. Kapitaalverkeer met het Buitenland. De Economist 122, 49–66 (1974). https://doi.org/10.1007/BF01680191
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DOI: https://doi.org/10.1007/BF01680191