Foreign Asset Accumulation among Emerging Market Economies: a Case for Coordination-Wang Yanan Institute for Studies in Economics (WISE), Xiamen University

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作者	Hao Jin, Hewei Shen
正文	We develop a two-sector, core-periphery country general equilibrium framework with endogenous financial crises to study foreign asset accumulation coordination among emerging market economies. Consistent with the policy prescription described by Bianchi(2011), we show that a national planner in each peripheral country prefers a higher asset position than the decentralized agents but may reduce welfare. A coordinator for all peripheral countries, who considers the general equilibrium effect of aggregate peripheral savings on the world interest rate, prefers a different asset position than the national planner. When we calibrate our model to a group of emerging Asian economies, the quantitative analysis shows that in the absence of coordination, national regulation leads to a 3.7% higher average net foreign asset position and a welfare loss relative to the laissez-faire. In contrast, the coordinated level of net foreign assets is 59% of the uncoordinated level and results in a sizable welfare gain.
JEL-Codes：	D62; E43; F32; F42; G01
关键词：	Foreign Asset Accumulation; World Interest Rate; Policy Coordination; Credit Constraints; Financial Crises.