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| Mao-wei Hung and Hsiao-yuan Yu |
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| ''Capital Flow, Nontradable Consumption and Home Bias'' |
| ( 2005, Vol. 6 No.9 ) |
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| This paper analyzes the relationship between net capital flow and home bias puzzle. The model suggests that both capital inflow and potential preference in home assets lead agents to allocate more in domestic and thus s home bias phenomenon. Besides, the more nontradable consumption, the fewer portfolios would be allocated in home assets. It is controversial with nontradable goods theorem. |
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| Keywords: |
JEL: F3 - International Finance: General
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| Manuscript Received : Feb 10 2005 | | Manuscript Accepted : Jun 20 2005 |
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