Abstract
This research finds ex-ante real earnings yields on the S&P Composite Index of equities to be significantly related to their subsequent annual returns over the last 150 years. The real earnings yield forecast is computed by adding a market-based prediction of long-term future inflation to the ratio between the highest past earnings on the S&P Composite and the current level of that stock market index. Equity return deviations from this real earnings yield over the last 150 years have been positively associated with the prior decade's inflation rate but negatively related to the current inflation rate.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
