Title

Macroeconomic Shocks and the Endogenous Response of the Stock Market and Real Interest Rates in a Neoclassical General-Equilibrium Model

Publication Type

Journal Article

Publication Date

1995

Abstract

This paper develops a neoclassical general equilibrium model to study the endogenous response of the stock market and the term structure of real interest rates in the face of a number of macroeconomic shocks believed to be important in the 1980s. An exogenous decline in savings, a debt-financed fiscal expansion, an increase in investment subsidy and an anticipation of higher productivity growth are found to have contrasting effects on the value of the stock market and the behaviour of the term structure of real interest rates in the model closed economy.

Discipline

Economic Theory

Research Areas

Economic Theory

Publication

Economic Modelling

Volume

12

Issue

1

First Page

28

Last Page

34

ISSN

0264-9993

Identifier

10.1016/0264-9993(94)p4153-7

Publisher

Elsevier

Additional URL

http://dx.doi.org/10.1016/0264-9993(94)p4153-7

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