We introduce a macroeconomic system which we use for interest rate determination, after which we generate the interest rate risk premium. Considering this risk premium function, we investigate, test and determine the macro-variables which affect the interest rate risk premia by using a...

Why do some countries industrialize later than others? Recent literature suggests that the prime reason is low agricultural productivity. This paper argues that the initial inequality of human capital could also be a contributing factor to the delayed process of industrialization characterizing...

This paper develops an integrated model, which addresses the recent Brandt, Cochrane and Santa-Clara (2006) puzzle of reconciling low international risk sharing with a high and variable equity premium. In addition, a new currency risk premium puzzle is also addressed. Following Kocherlakota and...

Why do some countries industrialize later than others? Recent literature suggests that the prime reason is low agricultural productivity. This paper argues that the initial level of human capital could also be a contributing factor. We construct a neoclassical growth model, which predicts that...

An intertemporal asset-pricing model is constructed incorporating an explicit adjustment-cost technology. The capital stock can be altered by investment, but there are adjustment costs whi ch lower the marginal return of investment. In a model involving an i nfinitely-lived representative agent,...