NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Financial Markets and the Real Economy

John Cochrane

NBER Working Paper No. 11193
Issued in March 2005
NBER Program(s):   AP   EFG

I survey work on the intersection between macroeconomics and finance. The challenge is to find the right measure of "bad times," rises in the marginal value of wealth, so that we can understand high average returns or low prices as compensation for assets' tendency to pay off poorly in "bad times." I survey the literature, covering the time-series and cross-sectional facts, the equity premium, consumption-based models, general equilibrium models, and labor income/idiosyncratic risk approaches.

download in pdf format
   (1218 K)

email paper

This paper is available as PDF (1218 K) or via email.

This paper was revised on September 26, 2006

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w11193

Published:

  • Cochrane, John (ed.) Financial Markets and the Real Economy Volume 18 of the International Library of Critical Writings in Financial Economics. London: Edward Elgar, March 2006. ,
  • Cochrane, John H., 2005. "Financial Markets and the Real Economy," Foundations and Trends(R) in Finance, now publishers, vol. 1(1), pages 1-101, July.

Users who downloaded this paper also downloaded these:
Bond, Edmans, and Goldstein w17719 The Real Effects of Financial Markets
Cochrane w7169 New Facts in Finance
Claessens, Tong, and Wei w17360 From the Financial Crisis to the Real Economy: Using Firm-level Data to Identify Transmission Channels
Gertler w2559 Financial Structure and Aggregate Economic Activity: An Overview
Campbell and Vuolteenaho w9509 Bad Beta, Good Beta
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us