Cochrane, John H. <br/><br/>
Macro-Finance / 
John H. Cochrane. 
 - Cambridge, Mass.  National Bureau of Economic Research  2016. 
 - 1 online resource:  illustrations (black and white); 
 - NBER working paper series  no. w22485 .
 - Working Paper Series (National Bureau of Economic Research)  no. w22485. .
<br/><br/> August 2016. 
<br/><br/> Macro-finance addresses the link between asset prices and economic fluctuations. Many models reflect the same rough idea: the market's ability to bear risk varies over time, larger in good times, and less in bad times.  Models achieve this similar result by quite different mechanisms, and I contrast their strengths and weaknesses.  I outline how macro-finance models may illuminate macroeconomics, by putting time-varying risk aversion, risk-bearing capacity, and precautionary savings at the center of recessions rather than variation in "the" interest rate and intertemporal substitution.  I emphasize unsolved questions and profitable avenues for research. 
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