Our paper examines the impact of heterogeneous trading technologies for households onasset prices and the distribution of wealth. We distinguish between passive traders whohold fixed portfolios of stocks and bonds, and active traders who adjust their portfolios tochanges in the investment...

This paper examines portfolios within the framework of a dynamic asset-pricingmodel when investors can trade equity assets as well as bonds of many different matu-rities. We specify the model so that investors have demand for both a risky and a safeincome stream. We characterize the resulting...