We studied the perception of wealth as a function of varying levels of assets and debt. We found that with total wealth held constant, people with positive net worth feel and are seen as wealthier when they have lower debt (despite having fewer assets). In contrast, people with equal but negative net worth feel and are considered wealthier when they have greater assets (despite having larger de...

We study the impact of nancing constraints on investment and output dynamics, in a continuous time setting with output a linear function of capital. Decline of net worth reduces investment and, if rms can rent capital to unconstrained outside investors, can create a `net worth trap' with both investment and output falling below normal levels for long time periods. We provide a detailed account ...

Results: The analysis finds that cash flow sensitivity is a valid measure of financial constraints in the Indian manufacturing sector. Results according to splitting criteria found that investment decisions of standalone firms are more sensitive to cash flow than group affiliated firms. Further, splitting the firms according to market capitalization and tangible net worth reveals a higher degre...

Having a sense of purpose in life appears valuable across life domains, though it remains unclear whether purpose also provides financial value to individuals. The current study examined sense of purpose as a predictor of concurrent and longitudinal income and net worth levels, using two waves of the MIDUS sample of adults (N = 4660 across both assessments). Participants who reported a higher s...

In Human Action, Ludwig von Mises employed two radically different notions of capital. The first was equivalent to what accountants call net worth. In calculating her profit and loss, the individual conceives of her income in terms of a change in net worth. If we shift the focus to an income stream, net worth (capital) can be said to refer to the capitalized value of that stream. Thus, the conc...