Fuad Hasanov

Abstract: This paper investigates whether the rate of interest such as the Treasury bill rate or the rate of return such as the return on a household portfolio is more relevant to the household's intertemporal decision making. In a current era, households are diversifiers ( ...

This paper relates consumption economics more closely to an aggregate financial variable than in any previous research. We compile the net real rate of return on a synthetic mutual fund (SMF) encompassing all major classes of financial assets and residential real estate. Return on the SMF better represents the market return of financial portfolio theory than any measure in use today and we demonstrate its merit in an expected utility model to estimate consumption parameters, the coefficient of relative risk aversion (CRRA), and intertemporal elasticity of substitution (IES). The estimates are stable across varying time periods and alternative measures of consumption. (JEL E21, D91, G11, C13)

Abstract: This paper computes an aggregate real after-tax rate of return on residential real estate in the United States. We account for net rental income, capital gain, and subsidies due to tax provisions for homeowners in constructing a total return measure. We also ...

Abstract: The more a country saves, the less it invests as a share of saving. We build a “store-or-sow” model of growth with precautionary saving and investment to study the nonlinear relationship between investment and saving. We contend that income volatility is an ...