Discussion: Financial Markets and the Real Economy1
John Cochrane has done an admirable job of summarizing a rather extensive empirical literature. The work is so exhaustive that I will not even attempt to comment on it in a systematic way. There are many very nice aspects to his discussion, and what follows merely provides some minor amendments.
To his credit, Cochrane considers again some of the early literature on consumption-based asset pricing and compares quotes across papers in an attempt at intellectual history. This is interesting reading, but I would urge others to read the whole papers, not just quotes. Some important breakthroughs occurred prior to Mehra and Prescott (1985) ...
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