This paper investigates testable restrictions on the time-series behavior of consumption and asset returns implied by a representative agent model with the spirit of capitalism in which intertemporal preference is rep...This paper investigates testable restrictions on the time-series behavior of consumption and asset returns implied by a representative agent model with the spirit of capitalism in which intertemporal preference is represented by a utility function that generalizes conventional, time-additive, expected utility. In the recursive structure of preference, the author examines the implication for cosumptions, portfolio holdings, and stock-market prices when investors accumulate wealth not only for the sake of consumption but also for wealth-induced social status. When investors care about relative social status, the propensity to consume and risk-taking behavior will depend on social standards, and stock prices will be volatible. Hence, the spirit of capitalism seems to be a driving force behind stock-market volatility and economic growth. Because the elasticity df substitution and the coefficient of relative risk aversion are independent and the spirit of capitalism is introduced, the equity premium puzzle can be partially explained in the model.展开更多
‘Behavioural economics’,or the application of methods and evidence from other social sciences to economics,has increased greatly in significance and use in the last two decades.In this paper,we discuss the basic ele...‘Behavioural economics’,or the application of methods and evidence from other social sciences to economics,has increased greatly in significance and use in the last two decades.In this paper,we discuss the basic elements of behavioural economics.We then assess the applications of behavioural economics to the analysis of tax compliance.Our central conclusion is that many,perhaps most,of the recent insights on what motivates tax compliance have flowed directly from behavioural economics.We conclude with suggestions on–and predictions of–directions in which future applications should prove useful.展开更多
文摘This paper investigates testable restrictions on the time-series behavior of consumption and asset returns implied by a representative agent model with the spirit of capitalism in which intertemporal preference is represented by a utility function that generalizes conventional, time-additive, expected utility. In the recursive structure of preference, the author examines the implication for cosumptions, portfolio holdings, and stock-market prices when investors accumulate wealth not only for the sake of consumption but also for wealth-induced social status. When investors care about relative social status, the propensity to consume and risk-taking behavior will depend on social standards, and stock prices will be volatible. Hence, the spirit of capitalism seems to be a driving force behind stock-market volatility and economic growth. Because the elasticity df substitution and the coefficient of relative risk aversion are independent and the spirit of capitalism is introduced, the equity premium puzzle can be partially explained in the model.
文摘‘Behavioural economics’,or the application of methods and evidence from other social sciences to economics,has increased greatly in significance and use in the last two decades.In this paper,we discuss the basic elements of behavioural economics.We then assess the applications of behavioural economics to the analysis of tax compliance.Our central conclusion is that many,perhaps most,of the recent insights on what motivates tax compliance have flowed directly from behavioural economics.We conclude with suggestions on–and predictions of–directions in which future applications should prove useful.
