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Risk-taking, fiscal policies, asset pricing, and stochastic growth with the spirit of capitalism

Author

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  • Gong, Liutang
  • Zou, Heng-fu

Abstract

In this paper, we study risk-taking, fiscal policies, and asset pricing in a stochastic model of growth with non-expected utility function and the spirit of capitalism. With specific assumptions on the production technology, preferences, and stochastic shocks, we derive the explicit solutions to the growth rates of consumption and savings and equilibrium returns on all assets. Finally, we give the effects of fiscal policies, the spirit of capitalism, and stochastic shocks on growth, asset pricing, and welfare.

Suggested Citation

  • Gong, Liutang & Zou, Heng-fu, 2012. "Risk-taking, fiscal policies, asset pricing, and stochastic growth with the spirit of capitalism," MPRA Paper 37426, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:37426
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    File URL: https://mpra.ub.uni-muenchen.de/37426/1/MPRA_paper_37426.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    the spirit of capitalism; fiscal policies; asset pricing; stochastic growth; non-expected utility;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • E0 - Macroeconomics and Monetary Economics - - General
    • H0 - Public Economics - - General

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