Financial Markets and the Real Economy

This insightful collection examines the intersection between macroeconomics and finance. The key challenge in this area is to find the right measure of 'bad times' (the marginal value of wealth) to explain some assets' high average returns or low prices as compensation for those assets' tendency to pay off poorly in bad times.

The volume includes a carefully chosen selection of articles that survey the various approaches to this question - including the equity premium, consumption based mode...