In this paper we use a representative consumer model to analyse the equilibrium relation between the transitory deviations from the common trend among consumption, aggregate wealth, and labour income, cay, and focus on the implications for both stock returns and housing returns. The evidence...

Empirical studies of the consumption-wealth relationship often assume a framework in which aggregate household spending depends linearly on wealth, the underlying state variable. These studies have given rise to many estimates of the wealth effect. In a general equilibrium setting, however, both...

Using a sample of equity carve-outs offered over the period of 1985-2015, we find out the time at which the market can know the effects of an equity carve-out on the wealth of existing shareholders. In equity carve-outs, the parent holds a significant fraction of the carved-out subsidiary....