This chapter surveys the literature on housing in macroeconomics. We first collect facts on
house prices and quantities in both the time series and the cross section of households and …

This paper surveys the field of asset pricing. The emphasis is on the interplay between
theory and empirical work and on the trade‐off between risk and return. Modern research …

Do wealthier households save a larger share of their incomes than poorer ones? We use
Norwegian administrative panel data on income and wealth to answer this empirical …

How should firms decide whether and when to invest in new capital equipment, additions to
their workforce, or the development of new products? Why have traditional economic models …

We study the effects of a credit crunch on consumer spending in a heterogeneous-agent
incomplete-market model. After an unexpected permanent tightening in consumers' …

This article defines and analyzes a “sparse max” operator, which is a less than fully attentive
and rational version of the traditional max operator. The agent builds (as economists do) a …

Most investment expenditures have two important characteristics: First, they are largely
irreversible; the firm cannot disinvest, so the expenditures are sunk costs. Second, they can …

This paper develops a class of recursive, but not necessarily expected utility, preferences
over intertemporal consumption lotteries. An important feature of these general preferences …

This book is intended for readers who are quite familiar with probability and stochastic
processes but know little or nothing about finance. It is written in the definition/theorem/proof …

Household finance—the normative and positive study of how households use financial
markets to achieve their objectives—has gained a lot of attention over the past decade and …