Previous research has documented strong peer effects in risk taking, but little is known about how such social influences affect market outcomes. The consequences of social interactions are hard to isolate in financial data, and theoretically it is not clear whether peer effects should increase...

In this paper I study the asset pricing implication of cross-country differences in income inequality. Using panel regression with year fixed effects, I document a strong negative relationship between cross-country stock market levels (as measured by each market's P/D ratio) and cross-country...

Our simple model features agents heterogeneous in skill and risk aversion, incomplete financial markets, and redistributive taxation. In equilibrium, agents become entrepreneurs if their skill is sufficiently high or risk aversion sufficiently low. Under heavier taxation, entrepreneurs are more...