Direct preferences for wealth, the risk premium puzzle, growth, and policy effectiveness
In 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.
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Fershtman, C. & Weiss, Y., 1991.
"Social Status , Culture and Economic Performance,"
32-91, Tel Aviv.
- Gurdip S. Bakshi & Zhiwu Chen, 1996.
"The Spirit of Capitalism and Stock-Market Prices,"
CEMA Working Papers
511, China Economics and Management Academy, Central University of Finance and Economics.
- Heng-fu Zou, 1995.
"The spirit of capitalism and savings behavior,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 28(1), pages 131-143, September.
- Fershtman, Chaim & Murphy, Kevin M & Weiss, Yoram, 1996.
"Social Status, Education, and Growth,"
Journal of Political Economy,
University of Chicago Press, vol. 104(1), pages 108-32, February.
- Grinols, Earl L, 1996. "The Link between Domestic Investment and Domestic Savings in Open Economies: Evidence from Balanced Stochastic Growth," Review of International Economics, Wiley Blackwell, vol. 4(2), pages 119-40, June.
- Corsetti, Giancarlo, 1997. "A portfolio approach to endogenous growth: equilibrium and optimal policy," Journal of Economic Dynamics and Control, Elsevier, vol. 21(10), pages 1627-1644, August.
- Grinols, E.L. & Turnovsky, S.J., 1992.
"Risk, the Financial Market and Macroeconomic Equilibrium,"
Discussion Papers in Economics at the University of Washington
92-01, Department of Economics at the University of Washington.
- Grinols, Earl L. & Turnovsky, Stephen J., 1993. "Risk, the financial market, and macroeconomic equilibrium," Journal of Economic Dynamics and Control, Elsevier, vol. 17(1-2), pages 1-36.
- Grinols, E.L. & Turnovsky, S.J., 1992. "Risk, the Financial Market and Macroeconomic Equilibrium," Working Papers 92-01, University of Washington, Department of Economics.
- Zou, Heng-fu, 1994.
"'The spirit of capitalism' and long-run growth,"
European Journal of Political Economy,
Elsevier, vol. 10(2), pages 279-293, July.
- Heng-fu Zou, 1991. "The spirit of capitalism and long-run growth," Policy Research Working Paper Series 630, The World Bank.
- Heng-fu Zou, 1995. "'The spirit of capitalism' and long-run growth," CEMA Working Papers 94, China Economics and Management Academy, Central University of Finance and Economics.
- Fischer, Stanley, 1975. "The Demand for Index Bonds," Journal of Political Economy, University of Chicago Press, vol. 83(3), pages 509-34, June.
- Maurice Obstfeld, 1992.
"Risk-taking, global diversification, and growth,"
Discussion Paper / Institute for Empirical Macroeconomics
61, Federal Reserve Bank of Minneapolis.
- Maurice Obstfeld, 1992. "Risk-Taking, Global Diversification, and Growth," NBER Working Papers 4093, National Bureau of Economic Research, Inc.
- Obstfeld, Maurice, 1992. "Risk-Taking, Global Diversification, and Growth," CEPR Discussion Papers 688, C.E.P.R. Discussion Papers.
- Maurice Obstfeld., 1993. "Risk-Taking, Global Diversification, and Growth," Center for International and Development Economics Research (CIDER) Working Papers C93-016, University of California at Berkeley.
- Corsetti, G., 1992. "A Portfolio Approach to Endogenous Growth Eaton's Model Revisited," Papers 678, Yale - Economic Growth Center.
- R. Mehra & E. Prescott, 2010.
"The equity premium: a puzzle,"
Levine's Working Paper Archive
1401, David K. Levine.
- Grinols, Earl L. & Turnovsky, Stephen J., 1994. "Exchange rate determination and asset prices in a stochastic small open economy," Journal of International Economics, Elsevier, vol. 36(1-2), pages 75-97, February.
- Harold L. Cole & George J. Mailath & Andrew Postlewaite, 1995.
"Incorporating concern for relative wealth into economic models,"
Federal Reserve Bank of Minneapolis, issue Sum, pages 12-21.
- Harold L. Cole & George J. Mailath & Andrew Postlewaite, . ""Incorporating Concern for Relative Wealth into Economic Models''," CARESS Working Papres 95-14, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
- Jonathan Eaton, 1981. "Fiscal Policy, Inflation and the Accumulation of Risky Capital," Review of Economic Studies, Oxford University Press, vol. 48(3), pages 435-445.
- Cole, Harold L & Mailath, George J & Postlewaite, Andrew, 1992. "Social Norms, Savings Behavior, and Growth," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1092-1125, December.
- Turnovsky, Stephen J. & Grinols, Earl, 1996. "Optimal government finance policy and exchange rate management in a stochastically growing open economy," Journal of International Money and Finance, Elsevier, vol. 15(5), pages 687-716, October.
- Turnovsky, Stephen J, 1993. "Macroeconomic Policies, Growth, and Welfare in a Stochastic Economy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(4), pages 953-81, November.
When requesting a correction, please mention this item's handle: RePEc:eee:dyncon:v:26:y:2002:i:2:p:247-270. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.