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Complex stock price dynamics under Max Weber’s spirit of capitalism hypothesis

Marco Airaudo ()
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Marco Airaudo: Drexel University

Economic Theory, 2017, vol. 64, issue 1, 47-73

Abstract: Abstract We introduce Max Weber’s spirit of capitalism hypothesis into a benchmark Lucas’ tree asset pricing model by assuming that economic agents derive direct utility from wealth. We prove the existence of perfect foresight equilibria where the price-dividend ratio displays explosive rational bubble solutions, endogenous periodic cycles and chaotic dynamics.

Keywords: Asset pricing; Bubbles; Endogenous cycles; Chaotic dynamics; Status; Wealth preferences; Spirit of capitalism (search for similar items in EconPapers)
JEL-codes: E32 G12 (search for similar items in EconPapers)
Date: 2017
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