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dc.contributor.authorCampbell, John
dc.contributor.authorViceira, Luis
dc.date.accessioned2009-07-01T14:28:55Z
dc.date.issued2001
dc.identifier.citationCampbell, John Y., and Luis M. Viceira. 2001. Who should buy long-term bonds? American Economic Review 91, no. 1: 99-127.en
dc.identifier.issn0002-8282en
dc.identifier.urihttp://nrs.harvard.edu/urn-3:HUL.InstRepos:3128709en_US
dc.description.abstractAccording to conventional wisdom, long-term bonds are appropriate for conservative long-term investors. This paper develops a model of optimal consumption and portfolio choice for infinite-lived investors with recursive utility who face stochastic interest rates, solves the model using an approximate analytical method, and evaluates conventional wisdom. As risk aversion increases, the myopic component of risky asset demand disappears but the intertemporal hedging component does not. Conservative investors hold assets to hedge the risk that real interest rates will decline. Long-term inflation-indexed bonds are most suitable for this purpose, but nominal bonds may also be used if inflation risk is low.en
dc.description.sponsorshipEconomicsen
dc.language.isoen_USen
dc.publisherAmerican Economic Associationen
dc.relation.isversionofhttp://dx.doi.org/10.1093/0198296940.003.0003en
dc.relation.hasversionhttp://www.aeaweb.org/aer/contents/mar2001.htmlen
dash.licenseLAA
dc.titleWho Should Buy Long-Term Bonds?en
dc.relation.journalAmerican Economic Reviewen
dash.depositing.authorCampbell, John
dc.data.urihdl:1902.1/FZLJAXFHBWen_US
dc.identifier.doi10.1093/0198296940.003.0003*
dash.contributor.affiliatedCampbell, John
dash.contributor.affiliatedViceira, Luis


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