Inflation, Portfolio Choice, and the Price of Land and Corporate Stock

24 Pages Posted: 28 May 2004 Last revised: 11 Dec 2022

See all articles by Martin S. Feldstein

Martin S. Feldstein

National Bureau of Economic Research (NBER) (deceased); Harvard University (deceased)

Date Written: August 1980

Abstract

This paper presents an explicit model of portfolio demand and uses it to show how the rate of inflation and its variances affect the real prices of land and of common stock. The analysis is thus an extension of two of the author's earlier papers which studied how the interaction of inflation and tax rules alter the real prices of land and stock. The analysis shows the importance of going beyond the traditional assumption that net-of-tax yields are equated for all assets.

Suggested Citation

Feldstein, Martin S., Inflation, Portfolio Choice, and the Price of Land and Corporate Stock (August 1980). NBER Working Paper No. w0526, Available at SSRN: https://ssrn.com/abstract=263406

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