This paper estimates volatility changes in daily returns to the Dow Jones Industrial Average over the sample period 1897 through 1988. This allow a direct investigation of the reaction of the level of stock prices and subsequent expected returns to these estimated changes in volatility. The...

This paper develops a general equilibrium model for analyzing the interaction of corporate financial and production decisions, consumers’ behavior and government financing. We use the model to investigate how changes in income tax rates and government debt policy affect production, interest...