Direct preferences for wealth, the risk premium puzzle, growth, and policy effectiveness
AbstractIn this paper, we consider social status, the spirit of capitalism, fiscal policies, and asset pricing in a stochastic model of growth. With specific assumptions on the production technology, preferences, and stochastic shocks, we derive the explicit solutions to the growth rates of consumption and savings and equilibrium returns on all assets. We further demonstrate how fiscal policies, the spirit of capitalism, and stochastic shocks affect growth, asset pricing, and welfare.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Dynamics and Control.
Volume (Year): 26 (2002)
Issue (Month): 2 (February)
Contact details of provider:
Web page: http://www.elsevier.com/locate/jedc
Other versions of this item:
- Liutang Gong & Heng-fu Zou, 2001. "Direct preferences for wealth, the risk premium puzzle, growth, and policy effectiveness," CEMA Working Papers 53, China Economics and Management Academy, Central University of Finance and Economics.
- E0 - Macroeconomics and Monetary Economics - - General
- G1 - Financial Economics - - General Financial Markets
- H0 - Public Economics - - General
- O0 - Economic Development, Technological Change, and Growth - - General
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