This paper uses micro data to estimate the determinants of household income and to measure how human capital and earnings uncertainty affect consumption. We also estimate how home-owners react to capital gains on housing and assess whether these gains are treated in the same way as other sources...

This paper uses data on the stock market valuations of a large sample of UK companies to assess if that market displays short-termism. Tests are undertaken of whether discount rates, implicit in market valuations, applied to cash flows which accrue in the longer term are too high, both...

Over the next few decades, there will be significant changes in the demographic structure of nearly all developed countries. Such dramatic demographic change could have a powerful impact upon saving behavior but estimates of how great the effects will be differ depending on what evidence is...

This paper analyses the choices made by households in the UK about mortgages. It considers whether there might be forms of market failure that prevent the structure of mortgage debt better reflecting the underlying preferences of households. UK households lie at one end of a spectrum of the...

This article uses stochastic simulations on a calibrated model to assess the impact of different pension reform strategies where financial markets are less than perfect. We investigate the optimal split between funded and unfunded systems when there are sources of uninsurable risk that are...

This paper presents evidence of persistent 'bull' and 'bear' regimes in UK stock and bond returns and considers their economic implications from the perspective of an investor's portfolio allocation. We find that the perceived state probability has a large effect on the optimal asset allocation,...

We analyse the equilibrium consequences of performance-based contracts for fund managers. Managerial remuneration is tied to a fund's absolute and relative performance. Investors choose whether or not to delegate their investment to better-informed fund managers; if they delegate they choose the...