Financial Markets and the Real Economy

The International Library of Critical Writings in Financial Economics series

Edited by John H. Cochrane, Myron S. Scholes Professor of Finance, University of Chicago Graduate School of Business, US

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.