Economic Growth and Equity Investing

Cornell, Bradford

doi:10.2139/ssrn.1433612

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Economic Growth and Equity Investing

31 Pages Posted: 18 Jul 2009 Last revised: 29 Dec 2015

See all articles by Bradford Cornell

Bradford Cornell

Anderson Graduate School of Management, UCLA

There are 2 versions of this paper

Date Written: July 13, 2009

Abstract

The performance of equity investments in the aggregate is inextricably linked to economic growth. Nonetheless, few papers on investing explicitly take account of research on economic growth. This paper bridges that gap by examining the implications of both theoretical models and empirical results from growth theory for equity investing. The result of the analysis is the conclusion that over the long run investors should anticipate real returns on common stock to average no more than about 4%.

Keywords: Economic Growth, Equity Investing

JEL Classification: G10

Suggested Citation: Suggested Citation

Cornell, Bradford, Economic Growth and Equity Investing (July 13, 2009). Available at SSRN: https://ssrn.com/abstract=1433612 or http://dx.doi.org/10.2139/ssrn.1433612