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Title: Aggregate dividends and consumption smoothing
Authors: Huang-Meier, Winifred (Shih-Yun)
Freeman, Mark
Keywords: Aggregate dividend policy
Consumption smoothing
Habit formation
Dynamic stochastic general equilibrium models
Issue Date: 2016
Publisher: © Elsevier
Citation: HUANG-MEIER, W. and FREEMAN, M.C., 2016. Aggregate dividends and consumption smoothing. International Review of Financial Analysis, 42, pp.324-335.
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.
Description: This paper was accepted for publication in the journal International Review of Financial Analysis and the definitive published version is available at http://dx.doi.org/10.1016/j.irfa.2015.08.008
Version: Accepted for publication
DOI: 10.1016/j.irfa.2015.08.008
URI: https://dspace.lboro.ac.uk/2134/18797
Publisher Link: http://dx.doi.org/10.1016/j.irfa.2015.08.008
ISSN: 1057-5219
Appears in Collections:Published Articles (Business)

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