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
Citation
Kong, Weng Ho and HOON, Hian Teck.
Macroeconomic Shocks and the Endogenous Response of the Stock Market and Real Interest Rates in a Neoclassical General-Equilibrium Model. (1995). Economic Modelling. 12, (1), 28-34.
Available at: https://ink.library.smu.edu.sg/soe_research/241
Additional URL
https://doi.org/10.1016/0264-9993(94)p4153-7