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The democratization of America's capital markets

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  • John V. Duca

Abstract

In this article, John Duca shows how financial innovations have benefited the United States by increasing the availability of financing for new firms and improving Americans' access to financial investments. Two dramatic examples are the explosive growth of venture capital financing and the doubling of stock ownership rates since the early 1980s. This democratization of America's capital markets stems from technological improvements that have cut the transaction and information costs of investing and from a series of deregulatory steps aimed at improving the availability of capital.

Suggested Citation

  • John V. Duca, 2001. "The democratization of America's capital markets," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q II, pages 10-19.
  • Handle: RePEc:fip:fedder:y:2001:i:qii:p:10-19
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    File URL: http://www.dallasfed.org/assets/documents/research/efr/2001/efr0102b.pdf
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    References listed on IDEAS

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    1. Heaton, John & Lucas, Deborah, 2000. "Portfolio Choice in the Presence of Background Risk," Economic Journal, Royal Economic Society, vol. 110(460), pages 1-26, January.
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    Cited by:

    1. Bilbiie, Florin O. & Straub, Roland, 2012. "Changes in the output Euler equation and asset markets participation," Journal of Economic Dynamics and Control, Elsevier, vol. 36(11), pages 1659-1672.
    2. Godek, John & Murray, Kyle B., 2008. "Willingness to pay for advice: The role of rational and experiential processing," Organizational Behavior and Human Decision Processes, Elsevier, vol. 106(1), pages 77-87, May.
    3. Aggarwal, Raj & Zong, Sijing, 2006. "The cash flow-investment relationship: International evidence of limited access to external finance," Journal of Multinational Financial Management, Elsevier, vol. 16(1), pages 89-104, February.
    4. Dan Herman, 2012. "The missing movement: a Polanyian analysis of pre-crisis America," International Journal of Social Economics, Emerald Group Publishing, vol. 39(8), pages 624-641, June.
    5. Florin O. Bilbiie & Roland Straub, 2013. "Asset Market Participation, Monetary Policy Rules, and the Great Inflation," The Review of Economics and Statistics, MIT Press, vol. 95(2), pages 377-392, May.
    6. Favilukis, Jack, 2013. "Inequality, stock market participation, and the equity premium," Journal of Financial Economics, Elsevier, vol. 107(3), pages 740-759.

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