Tobin's average q has usually been well above 1, but fell below 1 during 1974-1984. Our model explains this pattern and reconciles it with unchanging aggregate investment. The stock market value in the numerator of q reflects ownership of physical capital and knowledge, but the denominator...

This paper investigates the role in household wealth accumulation of saving for bequests. It employs data from a 1988 survey of TIAA-CREF annuitants designed to measure pension and other net worth as well as lifetime earnings. About half of the households in the data plan to leave estates and...