Julio: > If the central bank has many other assets in its portfolio, > it can do same for each of them. What holds between 2 assets > must hold among them all.
Well! This make sense if my utility function depends only on asset returns. But my utility funtion may depend on other "consumption items" such as preventing a 25 percent contraction of the national economy. > I thought you meant that each country's (e.g. Turkey's) central > bank could hold its own country's Eurodebt. Correct! But when the time comes when I want to sell them, what will I do if my bonds are illiquid? Sabri ____________________________________________________________________________________ Sucker-punch spam with award-winning protection. Try the free Yahoo! Mail Beta. http://advision.webevents.yahoo.com/mailbeta/features_spam.html
