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The Economists’ Voice

Ed. by Belke, Ansgar / Schnabl, Gunther

CiteScore 2017: 0.15

SCImago Journal Rank (SJR) 2017: 0.104
Source Normalized Impact per Paper (SNIP) 2017: 0.105

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Volume 2, Issue 4


What Does the Equity Premium Mean?

Simon Grant / John Quiggin
Published Online: 2005-09-17 | DOI: https://doi.org/10.2202/1553-3832.1088

Simon Grant and John Quiggin argue that taking the equity premium seriously—-the well-known fact that the average annual historical return of stocks is seven times that of government bonds and other debt-—has many implications, the most robust of which is that recessions are extremely costly even if they don’t lower average consumption and that macroeconomic stabilization policies are more important than has been thought.

Keywords: equity premium puzzle; resource allocation; welfare economics; public policy

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Published Online: 2005-09-17

Citation Information: The Economists' Voice, Volume 2, Issue 4, ISSN (Online) 1553-3832, DOI: https://doi.org/10.2202/1553-3832.1088.

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