<p>On the previous page (introducing equation 2.2) the authors state that "consumption asset" means "wealth portfolio", so <span class="math-container">$R_{c,t+1}$</span> is the return to the wealth portfolio, which makes sense from the equation you quote.</p>

<blockquote>
  <p>the log return to the consumption asset (wealth portfolio), <span class="math-container">$r_{c,t+1}$</span>.</p>
</blockquote>

CC BY-SA 4.0
2018-09-26T16:07:31.223Z
2018-09-26T16:07:31.223Z
Dan
<p>In a paper I was reading, a budget constraint for the Euler equation for the consumption asset was described as:-</p>

<p><span class="math-container">$$
W_{t+1} = (W_t - C_t) R_{c, t+1}
$$</span></p>

<p>Here <span class="math-container">$ R_{c, t+1}$</span> is the 'return to the consumption asset'. What does this mean?</p>

<p>Paper: <a href="http://www.nber.org/papers/w18104" rel="nofollow noreferrer">Volatility, the Macroeconomics, and Asset Prices</a></p>

<macroeconomics>
What is Return to Consumption Asset
Rajat Yadav
# What is Return to Consumption Asset

(Asked by: username_0 on 2018-09-23)

In a paper I was reading, a budget constraint for the Euler equation for the consumption asset was described as:-

$$
W\_{t+1} = (W\_t - C\_t) R\_{c, t+1}
$$

Here $ R\_{c, t+1}$ is the 'return to the consumption asset'. What does this mean?

Paper: [Volatility, the Macroeconomics, and Asset Prices](http://www.nber.org/papers/w18104)

**Tags:** macroeconomics

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## 1 answers

### Answer by username_1 on 2018-09-26. Score: 1

On the previous page (introducing equation 2.2) the authors state that "consumption asset" means "wealth portfolio", so $R\_{c,t+1}$ is the return to the wealth portfolio, which makes sense from the equation you quote.

> the log return to the consumption asset (wealth portfolio), $r\_{c,t+1}$.


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