I derive a production-based asset pricing formula to infer aggregate stock market returns from macroeconomic time series when the technology is putty-clay. Capital heterogeneity leads to variation in the aggregate stock market value through a new compositional effect. The asset pricing formula,...

In their debate article, Andrew Street and Alan Maynard highlight the problems with using average cost pricing for hospital payments in the English National Health Service, pointing out that lack of cost containment and failure to improve quality are potential weaknesses. In this invited comment...

This paper specifies and estimates a dynamic model of consumer preferences for new durable goods with persistent heterogeneous consumer tastes, rational expectations about future products and repeat purchases over time. Most new consumer durable goods, particularly consumer electronics, are...

This paper analyzes the evolution of Chinese urban income distribution across space and time in post-reform era. Our results suggest no evidence on income convergence across cities during the period 1984-2003. We find that cities with comparable income level are likely to be co-located in the...

Due to factors such as temptation, choices may not respect normative prefer- ence (the agent.s own, subjective view of what constitutes his welfare). Neverthe- less, the evidence on preference reversals suggests a means of recovering normative preference from choice. A de.nition of normative...

We develop and estimate a model of individual decisions to enrol in private health insurance in Australia in order to understand the effect of three specific government programs that changed the structure of premiums facing consumers. The three reforms encompass incomebased subsidies to...

This paper applies the methods of Detemple, Garcia, and Rindisbacher (2003, 2005) to derive optimal lifetime consumption-portfolio plans in an economy characterized by a N- factor Heath-Jarrow-Morton (1992) bond sector that is Markovian with respect to 3N state variables. The...

Over the past decade, risk measurement has received a much needed amount of attention from the .nancial community. Risk measures based on .xed quantiles un- der the actual probability distribution, especially Value-at-Risk and its re.nement the Conditional Tail Expectation, were instrumental in...