On Wed, 25 Apr 2001, Steve Keen wrote: > I think this may raise issues of the role of econometrics in economics, > which is a large topic! But just briefly, your model doesn't appear to > include a term for tcm10y. It includes tcm10y only as the discount factor for "pvprof", the capitalized value of the current profits stream. > I would be curious to see what results you got from a comparison > of this long term bond yield to the implied dividend yield of a > broad portfolio of stocks (such as the S&P500) plus the implied > average share price appreciation. Note that my data do show a somewhat "excessive" valuation of stocks relative to the estimated equilibrium, for the second half of 1999 through 2000 (perhaps I overstated by asking "What bubble?"). But this was on the rebound after a rather deep trough in 1993. Allin.
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