Accepted version of Huang-Meier and Freeman 2015.pdf (405.46 kB)
Aggregate dividends and consumption smoothing
journal contributionposted on 2015-09-18, 12:09 authored by Winifred (Shih-Yun) Huang-Meier, Mark Freeman
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.
- Business and Economics
Published inInternational Review of Financial Analysis
CitationHUANG-MEIER, W. and FREEMAN, M.C., 2016. Aggregate dividends and consumption smoothing. International Review of Financial Analysis, 42, pp.324-335.
- AM (Accepted Manuscript)
Publisher statementThis work is made available according to the conditions of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) licence. Full details of this licence are available at: https://creativecommons.org/licenses/by-nc-nd/4.0/
NotesThis 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