Asset pricing, habit memory, and the labor market

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ECB Working Paper ; No. 1163

Classification and Topics

• 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

Contributors, Places and Time

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

Further information

• Handle: http://hdl.handle.net/10419/153597
• Last update: 10.03.2025, 11:44 AM CET