National cultures significantly explain cross-country differences in the relation between asset growth and stock returns. Motivated by notion that managers individualistic low uncertainty-avoiding have a higher tendency to overinvest, this study aims show negative returns is stronger countries with such cultural features. Once researchers control for dimensions, proxies associated q-theory, lim...

Entrepreneurs are exposed to large uninsured risks, which may discourage them from creating productive assets. This generate asset shortages and stimulate speculative demand for bubbles. study introduces entrepreneurial risks into a textbook growth model with infinitely-lived agents. In the model, entrepreneurs face no credit constraints. If degree of is in middle range, bubbles likely emerge. ...

We introduce habit formation in a model that studies the link between international trade in financial assets, economic growth, and welfare. As with time separable preferences asset trade increases the mean growth rate, but it also increases growth-volatility. We demonstrate that the welfare gain from asset trade is lower with habit persistence in consumption. This reflects that the habit-formi...

We explore the relationship between education and the evolution of wealth after retirement. Asset growth following retirement depends in part on health capital and financial capital accumulated prior to retirement, which in turn are strongly related to educational attainment. These "initial conditions" at retirement can have a lingering effect on subsequent asset evolution. We aim to disentangl...

a r t i c l e i n f o JEL classification: C52 E44 G12 Keywords: Consumption based asset pricing model Multi-factor model Panel estimation Fixed effects This article considers a panel framework to test consumption based asset pricing models driven by a US stock market reference for a number of developed economies. Specifically, we focus on a linearized form of what might be seen as a consumption...

Using standard preferences for asset pricing has not been very successful in matching asset price characteristics such as the risk-free interest rate, equity premium and the Sharpe ratio to time series data. Behavioral finance has recently proposed more realistic preferences such as those with loss aversion. Research is starting to explore the implications of behaviorally founded preferences fo...

We use a standard single-agent model to conduct a simple consumption growth accounting exercise. Consumption growth is driven by news about current and expected future returns on the market portfolio. We impute the residual of consumption growth innovations that cannot be attributed to either news about financial asset returns or future labor income growth to news about expected future returns ...