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The Allocation of Capital Between Residential and Nonresidential Uses : Taxes, Inflation and Capital Market Constraints
Hendershott, Patric H. - 1981
We have constructed a simple two-sector model of the demand for housing and corporate capital. An increase in the inflation rate, with and with- out an increase in the risk premium on equities, was then simulated with a number of model variants. The model and simulation experiments illustrate...
Persistent link: https://www.econbiz.de/10012478397
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Inefficient Credit Booms
Lorenzoni, Guido - 2007
This paper studies the welfare properties of competitive equilibria in an economy with financial frictions hit by aggregate shocks. In particular, it shows that competitive financial contracts can result in excessive borrowing ex ante and excessive volatility ex post. Even though, from a...
Persistent link: https://www.econbiz.de/10012465000
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Capital-Market Imperfections and Investment
Hubbard, R. Glenn - 1997
Over the past decade, a number of researchers have extended conventional models of business fixed investment to … incorporate a role for financial constraints' in determining investment. This paper reviews developments and challenges in this … challenges. First, I describe analytical underpinnings of models of capital-market imperfections in the investment process, and …
Persistent link: https://www.econbiz.de/10012472822
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Financial Market Shocks and the Macroeconomy
Subrahmanyam, Avanidhar - 2013
Feedback from stock prices to cash flows occurs because information revealed by firms' stock prices influences the actions of competitors. We explore the implications of feedback within a noisy rational expectations setting with incumbent publicly traded firms and privately held new entrants. In...
Persistent link: https://www.econbiz.de/10012459278
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Complexity and Sophistication
Carvalho, Leandro - 2019
sophistication in a large and diverse sample. We randomly assigned both complexity to portfolio problems and the offer of a simple … alternative to portfolio choice. The less skilled opt out more often under complexity and thus earn lower returns, often from …
Persistent link: https://www.econbiz.de/10012479984
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Restoring Rational Choice : The Challenge of Consumer Financial Regulation
Campbell, John Y. - 2016
This lecture considers the case for consumer financial regulation in an environment where many households lack the knowledge to manage their financial affairs effectively. The lecture argues that financial ignorance is pervasive and unsurprising given the complexity of modern financial products,...
Persistent link: https://www.econbiz.de/10012456648
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How Family Status and Social Security Claiming Options Shape Optimal Life Cycle Portfolios
Hubener, Andreas - 2013
Household decisions are profoundly shaped by a complex set of financial options due to Social Security rules determining retirement, spousal, and survivor benefits, along with benefit adjustments that vary with the age at which these are claimed. These rules influence optimal household asset...
Persistent link: https://www.econbiz.de/10012459078
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Household Finance : Education, Permanent Income and Portfolio Choice
Cooper, Russell - 2013
wealth-income ratio. Model parameters, including preferences, the cost of stock market participation and portfolio adjustment …
Persistent link: https://www.econbiz.de/10012459207
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Houses as ATMs? Mortgage Refinancing and Macroeconomic Uncertainty
Chen, Hui - 2013
We estimate a structural model of household liquidity management in the presence of long-term mortgages. Households face counter-cyclical idiosyncratic labor income uncertainty and borrowing constraints, which affect optimal choices of leverage, precautionary saving in liquid assets and illiquid...
Persistent link: https://www.econbiz.de/10012459239
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The Effects of Investing Social Security Funds in the Stock Market When Fixed Costs Prevent Some Households from Holding Stocks
Abel, Andrew B. - 2000
With fixed costs of participating in the stock market, consumers with high income will participate in the stock market, but consumers with lower income will not participate. If a fully-funded defined-contribution social security system tries to exploit the equity premium by selling a dollar of...
Persistent link: https://www.econbiz.de/10012471011