We estimate a nominal life-cycle portfolio choice model using shopping coststo generate money demand. The model delivers realistic implications forstock market participation and portfolio composition because money crowdsout other assets at lower levels of wealth. We quantify how...

We estimate a nominal life-cycle portfolio choice model using shopping costs to generate money demand. The model delivers realistic implications for stock market participation and portfolio composition because money crowds out other assets at lower levels of financial wealth. Higher mean...

Why do Japanese households hold so few stocks? We use a quantitative life-cycle portfolio choice model to argue in favour of two main explanations. First, households have a very low level of trust in the stock market due to Japan's history of poor corporate governance. Second, stock returns to...