We study the nexus between endogenous growth and asset prices. Endogenous growth models with either horizontal or vertical innovation exhibit a good match to financial data due to countercyclical dividends which are either procyclical or acyclical in US data. In the model technology shocks...

We study a canonical model of decentralized exchange for a durable good or asset, where agents are assumed to have time-varying, heterogeneous utility types. Whereas the existing literature has focused on the special case of two types, we allow agents' utility to be drawn from an arbitrary...