Costly Portfolio Adjustment
---- Acknowledgements -----
We are grateful to the National Science Foundation for supporting this research. We thank seminar participants at the Federal Reserve Bank of Dallas, the Federal Reserve Bank of Kansas City, the CCER at Peking University, Melbourne University, Cambridge University, the EIEF in Rome, Oxford University, the Toulouse School of Economics, the Finance Division at the UBC Sauder School of Business and at the Pennsylvania State University for comments. Guozhong Zhu provided outstanding research assistance. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.