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The large spread between equity returns and risk free rates observed in most stock markets (the "equity premium puzzle") has been subject of intense debates. Two main families of models claim to solve this puzzle: habit formation models and loss aversion models. The goal of this paper is to...
Persistent link: https://www.econbiz.de/10005858060
This paper examines trends and determinants of gross domestic savings in Tanzania using data for the period 1990-2020. The autoregressive distributed lag approach is employed to empirically analyse the short-run and long-run relationships. There has been a fairly stable increase in the domestic...
Persistent link: https://www.econbiz.de/10014322660
One essential condition of economic progress in any society is an ample supply of savings, which depends on the growth of real capital. Economists agree that higher investment rates will lead to higher growth. Thus, domestic savings is considered an important determinant of growth in developing...
Persistent link: https://www.econbiz.de/10014477633
We review post-Keynesian assessments of the macroeconomic demand and growth impacts of financialisation. First, we examine the channels of influence of financialisation on distribution and on the different components of private aggregate demand, i.e. investment, consumption and net exports....
Persistent link: https://www.econbiz.de/10014493099
This paper argues that the usual framing of discussions of money, monetary policy, and fiscal policy plays into the hands of conservatives.That framing is also largely consistent with the conventional view of the economy and of society more generally. To put it the way that economists usually...
Persistent link: https://www.econbiz.de/10010318635
This paper examines the contributions of population aging, mortgage innovation and historically low interest rates to the sharp rise in U.S. house prices and mortgage debt between 1994 and 2005. I construct an overlapping generations general equilibrium housing model and find that these three...
Persistent link: https://www.econbiz.de/10010319625
We study the role of asset revaluation in the monetary transmission mechanism. We build an analytical heterogeneous-agents model with two main ingredients: i) rare disasters; ii) heterogeneous beliefs. The model captures time-varying risk premia and precautionary savings in a setting that nests...
Persistent link: https://www.econbiz.de/10014534395
This work is based on a new Keynesian theoretical model for an advanced economy, which incorporates overlapping generations to analyze a channel through which fluctuations in household financial wealth influence aggregate demand. The optimal monetary policy, corresponding to that of a central...
Persistent link: https://www.econbiz.de/10014541062
I study how unsecured credit affects the extent to which unemployment insurance (UI) policies smooth cyclical fluctuations in aggregate consumption. To do so, I develop a real business cycle model with incomplete asset markets, frictional labor markets, and defaultable debt. Using empirically...
Persistent link: https://www.econbiz.de/10014544670
In the United States, 30% of households are coholders who simultaneously borrow on credit cards and hold liquid assets. This generates a rich distribution of gross wealth positions that underpins the distribution of net wealth often used to calibrate macroeconomic models. We show that, beyond...
Persistent link: https://www.econbiz.de/10014564108