| Popis: |
Individuals’ risk aversion will, considered in total, fluctuate in the short-term around a stable long-term average, but in aggregate will vary with changes in demography. Because of the relative elasticities of corporate leverage and portfolio preferences, a change in the aggregate risk aversion of households has no impact on the required return on equity thus allowing the return on equity to remain constant over time. The adjustment to changes in aggregate risk thus takes place through changes in the long bond yield, either through changes in the short-term rate with an unchanged yield curve or through the stability of the former and a change in the steepness of the curve. The total ex post levels of savings and investment must be equal, but their level is partly determined by the decision over the combination of fiscal and monetary policy used to keep ex ante net savings at zero. At least two equilibria are thus needed for a stable economy; one is for ex ante net savings to be zero, the other is that the portfolio preference of households must match the desired level of corporate leverage. This avoids the criticism levelled about the neoclassical synthesis by George Akerlof. |
