Where is the market going? Uncertain facts and novel theories

John Cochrane

Economic Perspectives, 1997, vol. 21, issue Nov, 3-37

Abstract: The author surveys the statistical evidence on average stock return and the economic theories that try to explain it. The statistical evidence suggests a period of low returns, followed by a slow reversion to a high long-term average. However, that evidence is quite uncertain. Standard economics predicts tiny stock returns. The author surveys new economic models that predict high returns, but by fundamentally changing the description of stock market risk. He warns that a low forecast for stock returns does not mean one should sell.

Keywords: Stocks; Risk (search for similar items in EconPapers)
Date: 1997
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (76)

Downloads: (external link)
http://www.chicagofed.org/digital_assets/publicati ... /1997/epnovdec97.pdf (application/pdf)

Related works:
Working Paper: Where is the Market Going: Uncertain Facts and Novel Theories (2003)
Working Paper: Where is the Market Going? Uncertain Facts and Novel Theories (1998)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedhep:y:1997:i:nov:p:3-37:n:v.21no.6

Ordering information: This journal article can be ordered from

Access Statistics for this article

More articles in Economic Perspectives from Federal Reserve Bank of Chicago Contact information at EDIRC.
Bibliographic data for series maintained by Lauren Wiese ().