We provide a simple rational bubble model demonstrating that a concentration of income is necessary and sufficient for the existence of equilibria with risky speculative bubbles. Income concentration among top earners leads to excess savings and depressed interest rates, which facilitate the...

This paper proposes a structural approach to long-horizon asset allocation. In particular, the investor draws inferences about asset returns from a vector autoregression (VAR) with economic restrictions on the intercept, slope, and covariance matrix implied by the long-run risk model of Bansal...

The study tries to practically use the widely taught Capital Asset Pricing Model (CAPM) model for making investment decisions on Bombay Stock Exchange (BSE) –500 Index. Using CAPM, the study tries to investigate whether securities on BSE 500 are over-valued, properly valued or under-valued....