Essays on the Aggregate Effects of Frictions and Biases

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dc.contributor Aalto-yliopisto fi
dc.contributor Aalto University en
dc.contributor.author Sihvonen, Markus
dc.date.accessioned 2018-05-30T09:02:44Z
dc.date.available 2018-05-30T09:02:44Z
dc.date.issued 2018
dc.identifier.isbn 978-952-60-7985-1 (printed)
dc.identifier.issn 1799-4934 (printed)
dc.identifier.issn 1799-4934 (ISSN-L)
dc.identifier.uri https://aaltodoc.aalto.fi/handle/123456789/31308
dc.description Vain painettu julkaisu käytettävissä. fi
dc.description Please note that only printed copies available. Check Aalto University library's collections. en
dc.description.abstract This thesis studies the aggregate effects of portfolio frictions and biased beliefs. It consists of four diverse essays analyzing how such frictions affect business cycles, asset prices and the success probabilities of different types of agents.  The first essay studies the aggregate effects of a phenomenon known as "equity home bias". This refers to the empirically documented tendency of investors to overweight home stocks in equity portfolios. Intuitively home bias might lead to less risk sharing between countries and therefore strengthen business cycles. However, the essay shows that the welfare effects of home bias ultimately depend on the particular friction leading investors to overweight home stocks.  The second paper proposes a new policy to deal with the potential welfare costs associated with equity home bias and the lack of country-level risk sharing. It suggests that capital gains from home sources should be taxed at a higher rate than those from foreign sources. This is in contrast to standard arguments according to which capital gains from all sources should be taxed at the same rate.  The third paper studies the effects of biased beliefs on bond and currency returns. It proposes the first joint explanation for bond and currency markets based on expectational errors.  The last paper analyzes the effects of biased beliefs on the success probabilities of different types of agents. It derives new results related to biases concerning idiosyncratic sources of uncertainty. en
dc.format.extent 171
dc.language.iso en en
dc.publisher Aalto University en
dc.publisher Aalto-yliopisto fi
dc.relation.ispartofseries Aalto University publication series DOCTORAL DISSERTATIONS en
dc.relation.ispartofseries 89/2018
dc.subject.other Finance en
dc.title Essays on the Aggregate Effects of Frictions and Biases en
dc.type G5 Artikkeliväitöskirja fi
dc.contributor.school Kauppakorkeakoulu fi
dc.contributor.school School of Business en
dc.contributor.department Rahoituksen laitos fi
dc.contributor.department Department of Finance en
dc.subject.keyword finance en
dc.subject.keyword stock market en
dc.subject.keyword opinion en
dc.subject.keyword decision making en
dc.subject.keyword behavioral finance en
dc.identifier.urn URN:NBN:fi:aalto-201805302741
dc.type.dcmitype text en
dc.type.ontasot Doctoral dissertation (article-based) en
dc.type.ontasot Väitöskirja (artikkeli) fi
dc.subject.helecon rahoitus
dc.subject.helecon osakemarkkinat
dc.subject.helecon arvopaperimarkkinat
dc.subject.helecon sijoitukset
dc.subject.helecon portfolio
dc.subject.helecon behavioral finance
local.aalto.acrisexportstatus checked 2019-03-06_1540


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