Stock Prices and Fundamentals in a Production Economy

@inproceedings{Kiley2000StockPA,
  title={Stock Prices and Fundamentals in a Production Economy},
  author={Michael Kiley},
  year={2000}
}
This paper compares the predictions for the market value of firms from the Gordon growth model with those from a dynamic general equilibrium model of production. The predictions for movements in the market value of firms in response to a decline in the required return or an increase in the growth rate of the economy are quantitatively and qualitatively different across the models. While previous research has illustrated how a drop in the required return or an increase in the growth rate of the… CONTINUE READING

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