The Equity Risk Premium: A Review of Models
41 Pages Posted: 18 Aug 2015
Date Written: 2015-02-01
We estimate the equity risk premium (ERP) by combining information from twenty models. The ERP in 2012 and 2013 reached heightened levels — of around 12 percent — not seen since the 1970s. We conclude that the high ERP was caused by unusually low Treasury yields.
Keywords: equity premium, stock returns
JEL Classification: C58, G00, G12, G17
Suggested Citation: Suggested Citation