Monetary Policy and Reaching for Income

• 成果类型: Article
• 署名作者: Daniel, Kent; Garlappi, Lorenzo; Xiao, Kairong
• 署名单位: Columbia University; National Bureau of Economic Research; University of British Columbia
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.13004
• 发表日期: 2021
• 页码: 1145-1193
• 关键词: dividend policy; valuation; liquidity; finance; COSTS

摘要

Using data on individual portfolio holdings and on mutual fund flows, we find that low interest rates lead to significantly higher demand for income-generating assets such as high-dividend stocks and high-yield bonds. We argue that this reaching-for-income phenomenon is driven by investors who follow the living off income rule-of-thumb. Our empirical analysis shows that this preference for current income affects both household portfolio choices and the prices of income-generating assets. In addition, we explore the implications of reaching for income for capital allocation and the effectiveness of monetary policy.