"Post war US data show that consumption growth causes output and investment growth. This is puzzling if technology is … the driving force of the business cycle. I ask whether general equilibrium models driven by demand shocks can rationalize …

returns from the dividend yield give rise to a non-monotonic relationship between the investment horizon and the demand for …

risk-free interest rates. In fact, when the model is calibrated to U.S. consumption growth data, average risk premia and … bond yields similar to those displayed by post- depression (1938-1999) U.S. historical experience are generated for low … levels of risk aversion. Even ruling out pessimistic beliefs, recursive learning inflates the equity premium without …