Abstract

ABSTRACT This paper investigates the relationship between the investor structure and stock price by introducing heterogeneous traders into a standard DSGE model. This paper finds that the stock market experiences intense stock price fluctuations due to a high proportion of individual speculators. Our simulations indicate that the optimal proportion of individual speculators in China’s stock market is about 43% to maximize social welfare.

Full Text
Paper version not known

Talk to us

Join us for a 30 min session where you can share your feedback and ask us any queries you have

Schedule a call

Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.