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Junior is Rich: Bequests as Consumption / George M. Constantinides, John B. Donaldson, Rajnish Mehra.
- Format:
- Book
- Author/Creator:
- Constantinides, George M.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w11122.
- NBER working paper series no. w11122
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Junior is Rich
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2005.
- Summary:
- We explore the consequences for asset pricing of admitting a bequest motive into an otherwise standard overlapping generations model where agents trade equity and perpetual debt securities. Prices of securities are seen to be approximately 50% higher in an economy with bequests as compared to an otherwise identical one where bequests are absent. Robust estimates of the equity premium are obtained in several cases where the desire to leave bequests is modest relative to the desire for old age consumption.
- Notes:
- Print version record
- February 2005.
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