TY  - JOUR
AU  - Cochrane,John
TI  - Financial Markets and the Real Economy
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11193
PY  - 2005
Y2  - March 2005
UR  - http://www.nber.org/papers/w11193
L1  - http://www.nber.org/papers/w11193.pdf
N1  - Author contact info:
John H. Cochrane
Booth School of Business
University of Chicago
5807 S. Woodlawn
Chicago, IL  60637
Tel: 773/702-3059
Fax: 773/702-0458
E-Mail: john.cochrane@chicagobooth.edu
AB  - 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.
ER  -