We estimate an equilibrium asset pricing model in which agents' preferences have an unobserved external habit using the efficient method of moments (EMM). Given the estimated structural parameters we examine the cyclical behavior of expected stock returns in the model. We find that the estimated...

We examine how financial theory and economic principles offer guidance and predictions about the organization of investments and asset allocation decisions given the structure of taxes in estate--planning situations. We provide insight about many of the conventional approaches to estate planning...

This study analyzes upstream intergenerational transfers from middle-ages children to their elderly parents. We formulate a model in which the middle-aged child transfers both money and time to an elderly parent, based on an altruistic motive. We test the altruistic assumption empirically and...

We show that firms with the least elastic demand for equity capital should benefit the most from reductions in shareholder taxes. Consistent with this prediction, we find that, following 1997 and 2003 cuts in U.S. individual shareholder taxes, financially constrained firms, and particularly...

We derive cross-sectional implications of a capital gains tax rate change on the risk-return tradeoff on stock investment and show that stocks with higher accrued capital gains experience a larger risk-return tradeoff improvement after a capital gains tax rate cut. Stocks with higher dividend...

We show that firms with the least elastic demand for equity capital should benefit the most from reductions in shareholder taxes. Consistent with this prediction, we find that, following 1997 and 2003 cuts in U.S. individual shareholder taxes, financially constrained firms, and particularly...

We demonstrate that firms' investment and job creation are influenced by shareholder taxes on capital gains and dividend. More importantly, the relation between shareholder taxes and firms' investment and job creation varies with financial constraint that firms face. Less financially constrained...