Financially Intermediated and Stock Market consumption-investment allocations, with and without governmental interventions, are compared in a welfare sense in overlapping generations economies with (and without) shocks to agents' intertemporal preferences. We show that, first governmental interventions subject to the same informational requirements needed for financial intermediation to function, lead to stock market allocations that are no inferior to those attained under financial intermediation. Second, we argue that the necessary interventions are qualitatively no different from those required to implement stationary optimal allocations in OLG models without uncertainty regarding agents' consumption preferences.
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