Abstract
In this paper we construct a new methodology to measure the international income smoothing and we present stronger connection between foreign asset holding and international income smoothing for OECD countries.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Notes
In fact this is only an approximate relationship between the GDP and GNP. However, we neglect the remittances which is counted in GNP calculation. For detailed the formula you may check the U.N. Statistics Database.
Data set include Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Portugal, Spain, Australia, Canada, Japan, Iceland Korea, New Zealand, Norway, Singapore, Sweden, Switzerland, UK, and US.
Since it has negative level, Ireland’s home equity bias levels has not been reported in Fig. 1.
References
French K, Poterba J (1991) International diversification and international equity markets. Am Econ Rev 81:222–226
Grubel HL (1968) Internationally diversified portfolios: welfare gains and capital flows. Am Econ Rev 58:1299–1314
Lewis K (1999) Trying to explain home bias in equities and consumption. J Econ Lit 37:571–608
Sørensen BE, Yosha O (1998) International risk sharing and European monetary unification. J Int Econ 45:211–38
Sørensen BE, Wu YT, Yosha O, Zhu Y (2007) Home bias and international risk sharing: twin puzzles separated at birth. J Int Money Financ 26:587–605
Tesar L, Werner I (1995) Home bias and high turnover. J Int Money Financ 14:467–492
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Balli, F., Louis, R.J. & Osman, M. Income smoothing and foreign asset holdings. J Econ Finance 34, 23–29 (2010). https://doi.org/10.1007/s12197-008-9070-2
Published:
Issue Date:
DOI: https://doi.org/10.1007/s12197-008-9070-2