I show that countercyclical earnings dynamics can have quantitatively important effects on saving and portfolio choice decisions over the life cycle. During expansions (recessions) when expected future earnings growth is high (low), households save less (more) and also invest a higher (lower)...

We develop a macroeconomic framework in which firms are large and have market power with respect to both products and labor. Each firm maximizes a share-weighted average of shareholder utilities, which makes the equilibrium independent of price normalization. In a one-sector economy, if returns...

Employee share ownership is growing increasingly important. This paper studies employee share ownership in an economy with one monopoly union for each firm. We modify an implicit contract model by adding dividend income to the usual wage income. Union members differ in exogenous stock endowments...