Huang-Meier, W and Freeman, MC (2015) Aggregate dividends and consumption smoothing. International Review of Financial Analysis, 43. pp. 324-335. DOI https://doi.org/10.1016/j.irfa.2015.08.008
Huang-Meier, W and Freeman, MC (2015) Aggregate dividends and consumption smoothing. International Review of Financial Analysis, 43. pp. 324-335. DOI https://doi.org/10.1016/j.irfa.2015.08.008
Huang-Meier, W and Freeman, MC (2015) Aggregate dividends and consumption smoothing. International Review of Financial Analysis, 43. pp. 324-335. DOI https://doi.org/10.1016/j.irfa.2015.08.008
Abstract
We show that net equity payouts from the corporate sector play a crucial role in helping individuals manage their consumption path across the business cycle. In particular, we show that, as investors' desire to smooth consumption increases, optimal aggregate dividends become both more volatile and more counter-cyclical to help counterbalance pro-cyclical labor income. These findings are robust to whether or not agency conflicts exist in the economy.
Item Type: | Article |
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Uncontrolled Keywords: | Aggregate dividend policy; Consumption smoothing; Habit formation; Dynamic stochastic general equilibrium models |
Subjects: | H Social Sciences > HG Finance |
Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Essex Business School |
SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
Depositing User: | Unnamed user with email elements@essex.ac.uk |
Date Deposited: | 17 Sep 2015 16:08 |
Last Modified: | 30 Oct 2024 07:33 |
URI: | http://repository.essex.ac.uk/id/eprint/14935 |
Available files
Filename: Manuscript_AggregateDividendsAndConsumptionSmoothing_v2.pdf