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Microfoundations of Financial Economics

This book takes you from the level of microeconomics principles through a sequence of carefully elaborated and detailed steps to modern topics in finance. The book is for you if you have been exposed to indifference curves, budget constraints, and maximization but would like to know about the consumption capital asset pricing model, the theory of the term structure of interest rates, the equity premium puzzle, and the social cost of the business cycle. Even if you have not taken a course in basic microeconomics, you can still read this book, because it reviews the part of microeconomics and general equilibrium theory that is relevant for the topics covered in this book.
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