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PUBLIC STOCK OWNERSHIP
Author(s) -
CORNEO Giacomo
Publication year - 2018
Publication title -
annals of public and cooperative economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.526
H-Index - 37
eISSN - 1467-8292
pISSN - 1370-4788
DOI - 10.1111/apce.12193
Subject(s) - sovereign wealth fund , business , fund administration , stock (firearms) , finance , equity (law) , dividend , income fund , reputation , monetary economics , financial system , economics , investment fund , market economy , incentive , mechanical engineering , social science , sociology , market liquidity , law , political science , engineering
The government of a country with a good financial reputation could borrow from the international capital market and use the proceeds to endow a sovereign wealth fund that mainly invests in the world stock market. In expectation, this country would gain the equity risk premium multiplied by the size of the fund. This gain could be earmarked to a social dividend. This paper deals with the conditions under which such a policy is welfare‐improving, discusses the optimal size of such a fund, and proposes an institutional framework for the management of public stock ownership.