The Experts below are selected from a list of 360 Experts worldwide ranked by ideXlab platform
Robert Östling - One of the best experts on this subject based on the ideXlab platform.
-
Windfall Gains and Stock Market Participation
Journal of Financial Economics, 2021Co-Authors: Joseph Briggs, David Cesarini, Erik Lindqvist, Robert ÖstlingAbstract:We estimate the causal effect of wealth on stock market participation using administrative data on Swedish lottery players. A $150,000 Windfall gain increases stock ownership probability among pre-lottery non-participants by 12 percentage points, while pre-lottery stock holders are unaffected. The effect is immediate, seemingly permanent and heterogeneous in intuitive ways. Standard lifecycle models predict wealth effects far too large to match our causal estimates under common calibrations. Additional analyses suggest a limited role for explanations such as procrastination or real-estate investment. Overall, results suggest that “nonstandard” beliefs or preferences contribute to the nonparticipation of households across many demographic groups.
-
Windfall gains and stock market participation
Journal of Financial Economics, 2021Co-Authors: Joseph Briggs, David Cesarini, Erik Lindqvist, Robert ÖstlingAbstract:Abstract We exploit the randomized assignment of lottery prizes in a large administrative Swedish data set to estimate the causal effect of wealth on stock market participation. A $150,000 Windfall gain increases the stock market participation probability by 12 percentage points among prelottery nonparticipants but has no discernible effect on prelottery stock owners. A structural life cycle model significantly overpredicts entry rates even for very high entry costs (up to $31,000). Additional analyses implicate pessimistic beliefs regarding equity returns as a major source of this overprediction and suggest that both recent and early-life return realizations affect beliefs.
-
Windfall gains and stock market participation
Social Science Research Network, 2015Co-Authors: Joseph Briggs, David Cesarini, Erik Lindqvist, Robert ÖstlingAbstract:We estimate the causal effect of wealth on stock market participation using administrative data on Swedish lottery players. A $150,000 Windfall gain increases stock ownership probability among pre-lottery non-participants by 12 percentage points, while pre-lottery stock holders are unaffected. The effect is immediate, seemingly permanent and heterogeneous in intuitive ways. Standard lifecycle models predict wealth effects far too large to match our causal estimates under common calibrations. Additional analyses suggest a limited role for explanations such as procrastination or real-estate investment. Overall, results suggest that “nonstandard” beliefs or preferences contribute to the nonparticipation of households across many demographic groups.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
Anthony J. Venables - One of the best experts on this subject based on the ideXlab platform.
-
absorbing a Windfall of foreign exchange dutch disease dynamics
Journal of Development Economics, 2013Co-Authors: Frederick Van Der Ploeg, Anthony J. VenablesAbstract:Abstract The permanent income rule is seldom the optimal response to a Windfall of foreign exchange, such as that from a resource discovery. Absorptive capacity constraints require domestic investment, and investment in structures requires non-traded inputs the supply of which is constrained by the initial capital stock. This, particularly when combined with intra-sectoral capital immobility, delays adjustment and creates short run ‘Dutch disease’ symptoms as the real exchange rate sharply appreciates and overshoots its long run value. Optimal revenue management requires investing in the domestic non-traded goods sector and a slow build up of consumption. Accumulation of foreign assets adjusts to accommodate the time-paths of domestic consumption and investment.
-
Natural Resource Wealth: The Challenge of Managing a Windfall
Annual Review of Economics, 2012Co-Authors: Frederick Van Der Ploeg, Anthony J. VenablesAbstract:Many countries have failed to use natural resource wealth to promote growth and development. They have been damaged by the volatility of revenues and have failed to save a sufficiently high proportion of their resource revenues and failed to make high-return investments to support diversification of their economies. This review explores the reasons for these failures and discusses policies to improve performance.
-
natural resource wealth the challenge of managing a Windfall
Research Papers in Economics, 2011Co-Authors: Frederick Van Der Ploeg, Anthony J. VenablesAbstract:Many countries have failed to use natural resource wealth to promote growth and development. They have been damaged by volatility of revenues, have failed to save a sufficiently high proportion of their resource revenues and failed to make high return investments to support diversification of their economies. This paper explores the reasons for these failures and discusses policies to improve performance.
-
absorbing a Windfall of foreign exchange dutch disease dynamics
2010Co-Authors: Frederick Van Der Ploeg, Anthony J. VenablesAbstract:The response of an economy to a Windfall of foreign exchange (be it aid or natural resource revenues) is often constrained by absorptive capacity. We provide a micro-founded analysis of absorption constraints, based on the idea that expanding the economy's capital stock (in aggregate or sectorally) requires non-traded inputs, the supply of which is constrained by the initial capital stock. Given this constraint, the economy will manifest 'Dutch disease' symptoms, although many of them are temporary. On impact there is sharp appreciation of the real exchange rate, which will then depreciate back to its equilibrium level. In contrast to the permanent income hypothesis, real consumption jumps part of the way to its new long-run level, and then continues to rise. Depending on the capital-intensity of the investments needed for the adjustment, the economy may run a current account deficit or surplus in early years.
-
harnessing Windfall revenues optimal policies for resource rich developing economies
Research Papers in Economics, 2009Co-Authors: Frederick Van Der Ploeg, Anthony J. VenablesAbstract:A Windfall of natural resource revenue (or foreign aid) faces government with choices of how to manage public debt, investment, and the distribution of funds for consumption, particularly if the Windfall is both anticipated and temporary. We show that the permanent income hypothesis prescription of an ever-lasting increase in consumption financed by borrowing ahead of the Windfall and then accumulating a Sovereign Wealth Fund (SWF) is not optimal for capital-scarce developing economies. Such countries should accumulate public and private capital to accelerate their development and, only if the Windfall is large relative to initial foreign debt, is it optimal to build a SWF. The optimal time profile of consumption is biased towards the near future, as compared to the permanent income hypothesis. Outcomes depend on instruments available to government. We study cases where the government can make lump-sum transfers to consumers; where such transfers are impossible so optimal policy involves cutting distortionary taxation in order to raise investment and wages; and where Ricardian consumers can borrow against future revenues, in which case the policy response to possible over-consumption is a high level of investment in infrastructure.
Joseph Briggs - One of the best experts on this subject based on the ideXlab platform.
-
Windfall Gains and Stock Market Participation
Journal of Financial Economics, 2021Co-Authors: Joseph Briggs, David Cesarini, Erik Lindqvist, Robert ÖstlingAbstract:We estimate the causal effect of wealth on stock market participation using administrative data on Swedish lottery players. A $150,000 Windfall gain increases stock ownership probability among pre-lottery non-participants by 12 percentage points, while pre-lottery stock holders are unaffected. The effect is immediate, seemingly permanent and heterogeneous in intuitive ways. Standard lifecycle models predict wealth effects far too large to match our causal estimates under common calibrations. Additional analyses suggest a limited role for explanations such as procrastination or real-estate investment. Overall, results suggest that “nonstandard” beliefs or preferences contribute to the nonparticipation of households across many demographic groups.
-
Windfall gains and stock market participation
Journal of Financial Economics, 2021Co-Authors: Joseph Briggs, David Cesarini, Erik Lindqvist, Robert ÖstlingAbstract:Abstract We exploit the randomized assignment of lottery prizes in a large administrative Swedish data set to estimate the causal effect of wealth on stock market participation. A $150,000 Windfall gain increases the stock market participation probability by 12 percentage points among prelottery nonparticipants but has no discernible effect on prelottery stock owners. A structural life cycle model significantly overpredicts entry rates even for very high entry costs (up to $31,000). Additional analyses implicate pessimistic beliefs regarding equity returns as a major source of this overprediction and suggest that both recent and early-life return realizations affect beliefs.
-
Windfall gains and stock market participation
Social Science Research Network, 2015Co-Authors: Joseph Briggs, David Cesarini, Erik Lindqvist, Robert ÖstlingAbstract:We estimate the causal effect of wealth on stock market participation using administrative data on Swedish lottery players. A $150,000 Windfall gain increases stock ownership probability among pre-lottery non-participants by 12 percentage points, while pre-lottery stock holders are unaffected. The effect is immediate, seemingly permanent and heterogeneous in intuitive ways. Standard lifecycle models predict wealth effects far too large to match our causal estimates under common calibrations. Additional analyses suggest a limited role for explanations such as procrastination or real-estate investment. Overall, results suggest that “nonstandard” beliefs or preferences contribute to the nonparticipation of households across many demographic groups.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
David Cesarini - One of the best experts on this subject based on the ideXlab platform.
-
Windfall Gains and Stock Market Participation
Journal of Financial Economics, 2021Co-Authors: Joseph Briggs, David Cesarini, Erik Lindqvist, Robert ÖstlingAbstract:We estimate the causal effect of wealth on stock market participation using administrative data on Swedish lottery players. A $150,000 Windfall gain increases stock ownership probability among pre-lottery non-participants by 12 percentage points, while pre-lottery stock holders are unaffected. The effect is immediate, seemingly permanent and heterogeneous in intuitive ways. Standard lifecycle models predict wealth effects far too large to match our causal estimates under common calibrations. Additional analyses suggest a limited role for explanations such as procrastination or real-estate investment. Overall, results suggest that “nonstandard” beliefs or preferences contribute to the nonparticipation of households across many demographic groups.
-
Windfall gains and stock market participation
Journal of Financial Economics, 2021Co-Authors: Joseph Briggs, David Cesarini, Erik Lindqvist, Robert ÖstlingAbstract:Abstract We exploit the randomized assignment of lottery prizes in a large administrative Swedish data set to estimate the causal effect of wealth on stock market participation. A $150,000 Windfall gain increases the stock market participation probability by 12 percentage points among prelottery nonparticipants but has no discernible effect on prelottery stock owners. A structural life cycle model significantly overpredicts entry rates even for very high entry costs (up to $31,000). Additional analyses implicate pessimistic beliefs regarding equity returns as a major source of this overprediction and suggest that both recent and early-life return realizations affect beliefs.
-
Windfall gains and stock market participation
Social Science Research Network, 2015Co-Authors: Joseph Briggs, David Cesarini, Erik Lindqvist, Robert ÖstlingAbstract:We estimate the causal effect of wealth on stock market participation using administrative data on Swedish lottery players. A $150,000 Windfall gain increases stock ownership probability among pre-lottery non-participants by 12 percentage points, while pre-lottery stock holders are unaffected. The effect is immediate, seemingly permanent and heterogeneous in intuitive ways. Standard lifecycle models predict wealth effects far too large to match our causal estimates under common calibrations. Additional analyses suggest a limited role for explanations such as procrastination or real-estate investment. Overall, results suggest that “nonstandard” beliefs or preferences contribute to the nonparticipation of households across many demographic groups.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
Erik Lindqvist - One of the best experts on this subject based on the ideXlab platform.
-
Windfall Gains and Stock Market Participation
Journal of Financial Economics, 2021Co-Authors: Joseph Briggs, David Cesarini, Erik Lindqvist, Robert ÖstlingAbstract:We estimate the causal effect of wealth on stock market participation using administrative data on Swedish lottery players. A $150,000 Windfall gain increases stock ownership probability among pre-lottery non-participants by 12 percentage points, while pre-lottery stock holders are unaffected. The effect is immediate, seemingly permanent and heterogeneous in intuitive ways. Standard lifecycle models predict wealth effects far too large to match our causal estimates under common calibrations. Additional analyses suggest a limited role for explanations such as procrastination or real-estate investment. Overall, results suggest that “nonstandard” beliefs or preferences contribute to the nonparticipation of households across many demographic groups.
-
Windfall gains and stock market participation
Journal of Financial Economics, 2021Co-Authors: Joseph Briggs, David Cesarini, Erik Lindqvist, Robert ÖstlingAbstract:Abstract We exploit the randomized assignment of lottery prizes in a large administrative Swedish data set to estimate the causal effect of wealth on stock market participation. A $150,000 Windfall gain increases the stock market participation probability by 12 percentage points among prelottery nonparticipants but has no discernible effect on prelottery stock owners. A structural life cycle model significantly overpredicts entry rates even for very high entry costs (up to $31,000). Additional analyses implicate pessimistic beliefs regarding equity returns as a major source of this overprediction and suggest that both recent and early-life return realizations affect beliefs.
-
Windfall gains and stock market participation
Social Science Research Network, 2015Co-Authors: Joseph Briggs, David Cesarini, Erik Lindqvist, Robert ÖstlingAbstract:We estimate the causal effect of wealth on stock market participation using administrative data on Swedish lottery players. A $150,000 Windfall gain increases stock ownership probability among pre-lottery non-participants by 12 percentage points, while pre-lottery stock holders are unaffected. The effect is immediate, seemingly permanent and heterogeneous in intuitive ways. Standard lifecycle models predict wealth effects far too large to match our causal estimates under common calibrations. Additional analyses suggest a limited role for explanations such as procrastination or real-estate investment. Overall, results suggest that “nonstandard” beliefs or preferences contribute to the nonparticipation of households across many demographic groups.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
