How Excess Global Saving and Investor Exuberance Brought a Secular Rise in U.S. Stocks
5 Pages Posted: 18 Mar 2020
Date Written: February 21, 2020
This short paper shows how excess global saving led to asset price inflation in U.S. stocks during 1981 to 2019. It compares stock PE ratios to corporate bond values to explain that investor exuberance for stocks enabled and enhanced the extent of the secular stock rise.
Keywords: asset price inflation, exuberance for stocks, global savings glut, Shiller CAPE Ratio
JEL Classification: G1, G12, G32
Suggested Citation: Suggested Citation