If you experience any technical difficulties with this video or would like to make an accessibility-related request, please send a message to [email protected]. John C. Heaton, professor of Finance at the University of Chicago Booth School of Business, discusses what happens when "consumption strikes back" and how fundamental economic variables regain importance in explaining risk premiums in stock markets. He also discusses how a decline in the stock market today may reflect an underlying shock to the economy that will not dissipate quickly and will have an impact over a long horizon.