The Choice Channel of Financial Innovation

• 成果类型: Article
• 署名作者: Iachan, Felipe S.; Nenov, Plamen T.; Simsek, Alp
• 署名单位: Getulio Vargas Foundation; BI Norwegian Business School; Massachusetts Institute of Technology (MIT); National Bureau of Economic Research; Centre for Economic Policy Research - UK
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MACROECONOMICS
• ISSN/ISSBN: 1945-7707
• DOI: 10.1257/mac.20180429
• 发表日期: 2021
• 页码: 333-372
• 关键词: wealth

摘要

Financial innovation in recent decades has expanded portfolio choice. We investigate how greater choice affects investors' savings and asset returns. We establish a choice channel by which greater portfolio choice increases investors' savings-by enabling them to earn the aggregate risk premium or take speculative positions. In equilibrium, portfolio customization (access to risky assets beyond the market portfolio) reduces the risk-free rate. Participation (access to the market portfolio) reduces the risk premium but typically increases the risk-free rate. Empirically, stock market participants in the United States save more than nonparticipants and have increasingly dispersed portfolio returns, consistent with the choice channel.