Internet Appendix for "Misallocation and Asset Prices"

Abstract

This is the supplemental material to the paper titled “Misallocation and Asset Prices” (Dou et al., 2025). It includes the mathematical proofs for all the theoretical results in Dou et al. (2025). It also provides additional quantitative and empirical results.

Keywords: Distribution of firms, Financial frictions, Endogenous growth, Intangible q, Stochastic discount factor, Welfare costs of economic fluctuations.

JEL Classification: L11, O30, O40