The Ricardian Equivalence Theorem, which is the proposition that changes in the timing of lump-sum taxes have no effect on consumption or capital accumulation, depends on the existence of operative altruistic motives for intergenerational transfers. These transfers can be bequests from parents...

An individual investor’s demands for risky capital and riskless bonds depend on the investor’s subjective beliefs about the payoff to risky capital. This paper determines equilibrium asset prices and returns in a capital market in which investors have heterogeneous subjective expectations of...

This paper presents a general equilibrium model with logarithmic preferences and technology. If the non-negativity constraint on bequests is strictly binding, then the bequest motive is characterized as inoperative. After determining the conditions for operative and inoperative bequest motives,...

This paper analyzes the effects of lump-sum tax policy in an overlapping generations model in which consumers have uncertain longevity. It extends previous analyses by considering the case in which private insurance arrangements are actuarially unfair. In addition, it considers the polar case of...

An individual investor’s demands for risky capital and riskless bonds depend on the investor’s subjective beliefs about the payoff to risky capital. This paper determines equilibrium asset prices and returns in a capital market in which investors have heterogeneous subjective expectations of...

In the absence of monetary superneutrality, inflation affects capital accumulation and the demand for real balances. This paper derives the combination of monetary end lump-sum fiscal policy which maximizes the sum of discounted utilities of representative consumers in present and future...

In the absence of monetary superneutrality, inflation affects capital accumulation and the demand for real balances. This paper derives the combination of monetary end lump-sum fiscal policy which maximizes the sum of discounted utilities of representative consumers in present and future...

This paper derives simple closed-form solutions for expected rates of return on stocks and riskless one-period bills under the assumption that shocks to the growth rates of consumption and dividends are generated by a Markov regime-switching process. These closed-form solutions are used to show...