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Article Dans Une Revue European Economic Review Année : 2017

The home bias of the poor: Foreign asset portfolios across the wealth distribution

Tobias Broer

Résumé

This paper documents how the share of foreign stocks in US household portfolios rises with the ratio of financial wealth to non-financial income. This is both because wealthier households are more likely to participate in foreign asset markets, and because portfolio shares of participants increase with financial wealth but decrease with non-financial income. A simple, standard two-country general equilibrium model shows that hedging of terms of trade movements and non-financial income risk produces non-trivial heterogeneity in portfolios across the wealth and income distribution within countries that is qualitatively in line with this evidence.
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Dates et versions

hal-04489981 , version 1 (05-03-2024)

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  • HAL Id : hal-04489981 , version 1

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Tobias Broer. The home bias of the poor: Foreign asset portfolios across the wealth distribution. European Economic Review, 2017, 92, pp.74-91. ⟨hal-04489981⟩
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