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 InfoPaper provided by China Economics and Management Academy, Central University of Finance and Economics in its series CEMA Working Papers with number 53.
Date of creation: 2001
Date of revision:
Publication status: Published in Journal of Economic Dynamics and Control, Volume 26, Issue 2, February 2002, Pages 247-270
Social status; The spirit of capitalism; Fiscal policies; Asset pricing; Stochastic growth;
Other versions of this item:
- Gong, Liutang & Zou, Heng-fu, 2002. "Direct preferences for wealth, the risk premium puzzle, growth, and policy effectiveness," Journal of Economic Dynamics and Control, Elsevier, vol. 26(2), pages 247-270, February.
- 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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