Stock Prices and Fundamentals in a Production Economy
This paper by the Federal Reserve Board compares the predictions for the market value of firms from the Gordon growth model with those from a dynamic general equilibrium model of production. Special attention is focused on the prediction 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 … [ Read more ]
Content: Article | Author: Michael T. Kiley | Source: “Federal Reserve Board (FRB)” | Subjects: Economics, Market/Investment | Industry: Investing