The Demand for Risky Assets.
This article develops an aggregate demand function for risky assets in the U.S. Prior to analyzing the survey data, the paper will adapt and extend existing theory to obtain the relationships between the composition of household wealth and their utility functions. These relationships are suitable fo...
| Published in: | American Economic Review Vol. 65; no. 5; pp. 900 - 923 |
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| Main Authors: | , |
| Format: | Article |
| Published: |
American Economic Association
Dec75
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| Subjects: | |
| Online Access: | View this record in EBSCOhost |
| Summary: | This article develops an aggregate demand function for risky assets in the U.S. Prior to analyzing the survey data, the paper will adapt and extend existing theory to obtain the relationships between the composition of household wealth and their utility functions. These relationships are suitable for statistical analysis at both the micro and macro levels. The article concludes that the assumption of constant proportional risk aversion for households is as a first approximation a fairly accurate description of the market place. Under tenable assumptions, the authors develop a simple form of the aggregate equilibrium relationship between the relative demand for risky assets and the market price of risk. |
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