Arbeitspapier

Asset pricing, habit memory, and the labor market

This article studies the asset pricing and the business cycle implications of habit formation in a production economy with capital adjustment costs and endogenous labor supply. A specification of internal habit in the mix of consumption and leisure which minimizes the wealth effect on labor supply is introduced into an otherwise standard real business cycle model. This mechanism enhances the model’s ability to explain asset pricing puzzles.

Language
Englisch

Bibliographic citation
Series: ECB Working Paper ; No. 1163

Classification
Wirtschaft
Asset Pricing; Trading Volume; Bond Interest Rates
Business Fluctuations; Cycles
Time Allocation and Labor Supply
Subject
adjustment costs
equity premium puzzle
Labor supply
Equity-Premium-Puzzle
Arbeitsmarkt
CAPM
Theorie

Event
Geistige Schöpfung
(who)
Jaccard, Ivan
Event
Veröffentlichung
(who)
European Central Bank (ECB)
(where)
Frankfurt a. M.
(when)
2010

Handle
Last update
10.03.2025, 11:44 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Jaccard, Ivan
  • European Central Bank (ECB)

Time of origin

  • 2010

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