Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/82062
Authors: 
Madsen, Jakob B.
Year of Publication: 
2003
Series/Report no.: 
EPRU Working Paper Series 2003-12
Abstract: 
This paper develops a theory of medium term share price movements under slow adjustment in the labour market relative to the share market and perfect foresight in the share market. The model seeks to explain the slow movements in real share prices that have been observed in the OECD countries over the past 130 years. Using 130 years of data for the OECD countries, the empirical evidence indicates that movements in factor shares are crucial determinants of medium-term movements in share prices.
Subjects: 
share prices
supply shocks
rational expectations
JEL: 
G12
E31
E43
Document Type: 
Working Paper

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