The Risk Premium For Equity: Implications For Resource Allocation, Welfare And Policy
AbstractAnalysis of the equity premium puzzle has focused on private sector capital markets. The object of this paper is to consider the welfare and policy implications of each of the broad classes of explanations of the equity premium puzzle. As would be expected, the greater the deviation from the first-best outcome implied by a given explanation of the equity premium puzzle, the more interventionist are the implied policy conclusions. Nevertheless, even explanations of the equity premium puzzle consistent with a general consumption-based asset pricing model have important welfare and policy implications. Copyright Blackwell Publishing Ltd/University of Adelaide and Flinders University 2006.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Australian Economic Papers.
Volume (Year): 45 (2006)
Issue (Month): 3 (09)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0004-900X
Other versions of this item:
- Grant, Simon & Quiggin, John, 2004. "The risk premium for equity: implications for resource allocation, welfare and policy," Risk and Sustainable Management Group Working Papers 151167, University of Queensland, School of Economics.
- Simon Grant & John Quiggin, 2004. "The risk premium for equity: implications for resource allocation, welfare and policy," Risk & Uncertainty Working Papers WPR04_8, Risk and Sustainable Management Group, University of Queensland.
- G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
- H1 - Public Economics - - Structure and Scope of Government
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- Kim, Sei-Wan & Krausz, Joshua & Nam, Kiseok, 2013. "Revisiting asset pricing under habit formation in an overlapping-generations economy," Journal of Banking & Finance, Elsevier, vol. 37(1), pages 132-138.
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