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Social and Behavioral Sciences Commons™
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Articles 1 - 2 of 2
Full-Text Articles in Social and Behavioral Sciences
Demography And The Long-Run Predictability Of The Stock Market, John Geanakoplos, Michael Magill, Martine Quinzii
Demography And The Long-Run Predictability Of The Stock Market, John Geanakoplos, Michael Magill, Martine Quinzii
Cowles Foundation Discussion Papers
Stock market price/earnings ratios should be influenced by demography. Since demography is predictable, stock returns should be as well. We provide a simple stochastic OLG model with a cyclical structure that generates cyclical P/E ratios. We calibrate the model to roughly fit the cyclical features of historical P/E ratios.
The Mildest Recession: Output, Profits, And Stock Prices As The U.S. Emerges From The 2001 Recession, William D. Nordhaus
The Mildest Recession: Output, Profits, And Stock Prices As The U.S. Emerges From The 2001 Recession, William D. Nordhaus
Cowles Foundation Discussion Papers
This essay examines the state of the United States economy as it emerges from the 2001 recession. A comparison of several central economic variables indicates that the 2001 recession was the mildest recession in the postwar period. In light of highly differentiated characteristics of recessions, the paper suggests that we differentiate among downturns by a five-category “recession severity scale,” analogous to the Saffir-Simpson Hurricane Scale. According to this approach, the 2001 recession fits in the least severe box, a “category I recession,” along with the 1963 and 1967 non-recessions. The paper next examines the behavior of profits in recent years …