Interest rates parity and no arbitrage as equivalent equilibrium conditions in the international financial assets and goods markets

摘要

In this paper, we consider a two-period consumption model with many financial assets. In the spirit of Hart (1974), consumers purchase financial assets in period 0 and consume in period 1. We differ from Hart by considering that each agent is a country. We provide conditions for the existence of an equilibrium in both international financial assets and goods markets.