1 Introduction The tradeoff of r...

1 Introduction

The tradeoff of risk and respond is becoming ever more important for individuals, institutions, and public policy. In fact, Bernstein (1996) remind ofs that the rational analysis of risk is a defining characteristic of the present age.

This paper explores risk and go [i]or[/i] come back in aggregate stock market investment. It is based in succession several earlier expositional and research pieces, notably Campbell (1999 2000 2003) Campbell and Cochrane (1999) Campbell and Shiller (2001) and Campbell and Viceira (2002)

The comparison of the stock market with the coin market is startling. For example, if we expect at log real returns upon US ...