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Handbook of the Economics of Finance by Rene M. Stulz, Milton Harris, George M. Constantinides

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Chapter 21

Household Finance: An Emerging Field *

Luigi Guisoa and Paolo Sodinib

aEinaudi Institute for Economics and Finance, Via Sallustiana 62-00187 Rome, Italy

bDepartment of Finance, Stockholm School of Economics, Sveavägen 65, Box 6501, SE-113 83 Stockholm, Sweden

Abstract

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 has become a field with its own identity, style, and agenda. In this chapter we review its evolution and most recent developments.

Keywords

Household finance; financial mistakes; financial literacy; portfolio allocation; debt decision; consumer financial regulation

1 The Rise of Household Finance

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