Wachter, Jessica (contributor) - 2008 - Current draft: September 24, 2008
of dividends. Numerous studies have shown, however, that this
is not the case. In fact, there is excess stock market …
consumption process. Assume that, in event of a disaster, there will be a
default on government liabilities with probability q. I … follow Barro (2006) and
assume that in the event of default, the percent loss is equal to the percent
fall in consumption …