We use a two-sector model of structural transformation and balanced growth to show that the real interest rate, measured as the return on capital in units of GDP or in units of aggregate consumption, declines as income grows. This is due to the differential TFP growth in the goods producing...

This paper provides empirical evidence on the relation between stock returns and inflationary expectations using a panel of firm level data covering a broad range of industries and Turkish common stock market index from 1986 to 2013. I use survey of inflationary expectations to examine Fisher...

This paper develops a two-sector dynamic stochastic general equilibrium model to measure intangible capital stock and studies the implied riskiness of market value of capital. The equilibrium of the economy is characterized by a state-space representation of dynamic system. Kalman filter...

Purpose - The purpose of this paper is to test whether financial analysts' rationality in making stocks' earnings forecasts is homogenous or not across different information regimes in stocks' past returns. Design/methodology/approach - By treating stocks' past returns as the information...