This paper provides a closed-form solution to a standard asset pricing model with habit formation when the growth rate of endowment follows a first-order Gaussian autoregressive process. We determine conditions that guarantee the existence of a stationary bounded equilibrium. The findings are useful because they allow to evaluate the accuracy of various approximation methods to nonlinear rational expectation models. Furthermore, they can be used to perform simulation experiments to study the finite sample properties of various estimation methods.

Earth-based building material processing is a challenge for new constructions. Moreover, field measurements to obtain the rheological properties of fresh materials are required in building applications. However, existing field-oriented tests were designed for more flowable materials, and new protocols for stiff materials are rarely available. In this paper, a fieldoriented test of yield stress is developed for earth-based building materials accurate enough to identify small variations for demanding applications. The squeeze test is used as the reference measurement of yield stress. For pure clays and two clay-based materials, yield stresses could not be easily linked to two existing tests: the Atterberg limits and the falling plunger. Finally, a weighted plunger test was used to measure the yield stress as accurately as the squeeze test.The development of yield stress measurements for fresh earthen materials will help implement new building techniques on the field.

This paper develops a capital asset pricing modelà la Lucas with habit formation when the growth rate of endowment follows a first order Gaussian autoregression. We provide a closed form solution of the price-dividend ratio and determine conditions that guarantee the existence of a bounded equilibrium. The habit stock model is found to possess internal propagation mechanisms that (i) amplify the effects of shocks to endowment and (ii) increase the persistence. These features imply that, although risk aversion is not time-varying and all investors are identical, the model can solve the predictability puzzle.

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This paper shows, from the consumer budget constraint, that the consumption spending and the different components of total wealth, i.e. financial, housing and human wealths, are cointegrated and that deviations from the common trend cahy is a proxy for the consumption-wealth ratio that should predict expected returns on financial assets and housing. Using U.S postwar data, we provide empirical evidence in favor of the existence of a cointegration relationship with a structural break in the mid-eighties. Moreover, we show that until the beginning of 2000, consumption spending and housing wealth were dominated by permanent shocks. The main variable that adjusts to restore the long-run trend when a deviation occurs is the financial wealth and therefore it presents the main transitory variations in total wealth. However, over the last period 2000-2009, most of transitory shocks in total wealth are associated to fluctuations in the housing component of wealth rather than financial wealth. Besides, we found that a small fraction of transitory changes in wealth is associated with movements in consumption. These conclusions are in line with our empirical results on the ability of the cahy to predict expected asset and housing returns. Indeed, until the beginning of 2000, the proxy of the consumption-wealth ratio predicts expected asset returns and fails to explain future fluctuations in housing returns.