This paper studies the role of detrended wealth in predicting stock returns. We call a transitory movement in wealth … we find that these trend deviations in wealth are strong predictors of both real stock returns and excess returns over a …. Why should wealth, detrended in this way, forecast asset returns? We show that a wide class of optimal models of consumer …

In this paper we examine the link between wage inequality and consumption inequality using a life cycle model that …