Serbia's Stock Market Defies Traditional Investment Puzzles, Revealing New Insights.
The article examines the equity premium in Serbia from 2007 to 2014 using a consumption-based model and data on stocks, Treasury bills, inflation, and consumption. Surprisingly, Serbia does not show the usual puzzles seen in developed markets. The study finds reasonable values for risk aversion and discount factors, with investors influenced by both risk aversion and precautionary saving motives. A structural break in 2008 does not change the results significantly.