The declining U.S. equity premium

This study demonstrates that the U.S. equity premium has declined significantly during the last three decades. The study calculates the equity premium using a variation of a formula in the classic Gordon stock valuation model. The calculation includes the bond yield, the stock dividend yield, and the expected dividend growth rate, which in this formulation can change over time. The study calculates the premium for several measures of the aggregate U.S. stock portfolio and several assumptions about bond yields and stock dividends and gets basically the same result. The premium averaged about 7 percentage points during 1926–70 and only about 0.7 of a percentage point after that. This result is shown to be reasonable by demonstrating the roughly equal returns that investments in stocks and consol bonds of the same duration would have earned between 1982 and 1999, years when the equity premium is estimated to have been zero.Stock market

The Declining U.S. Equity Premium

This study demonstrates that the U.S. equity premium has declined significantly during the last three decades. The study calculates the equity premium using a variation of a formula in the classic Gordon stock valuation model. The calculation includes the bond yield, the stock dividend yield, and the expected dividend growth rate, which in this formulation can change over time. The study calculates the premium for several measures of the aggregate U.S. stock portfolio and several assumptions about bond yields and stock dividends and gets basically the same result. The premium averaged about 7 percentage points during 1926 70 and only about 0.7 of a percentage point after that. This result is shown to be reasonable by demonstrating the roughly equal returns that investments in stocks and consol bonds of the same duration would have earned between 1982 and 1999, years when the equity premium is estimated to have been zero.

Revealing the pace of river landscape evolution during the Quaternary: recent developments in numerical dating methods

During the last twenty years, several technical developments have considerably intensified the use of numerical dating methods for the Quaternary. The study of fluvial archives has greatly benefited from these enhancements, opening new dating horizons for a range of archives at distinct time scales and thereby providing new insights into previously unanswered questions. In this contribution, we separately present the state of the art of five numerical dating methods that are frequently used in the fluvial context: radiocarbon, Luminescence, Electron Spin Resonance (ESR), 230Th/U and terrestrial cosmogenic nuclides (TCN) dating. We focus on the major recent developments for each technique that are most relevant for new dating applications in diverse fluvial environments and on explaining these for non-specialists. Therefore, essential information and precautions about sampling strategies in the field and/or laboratory procedures are provided. For each method, new and important implications for chronological reconstructions of Quaternary fluvial landscapes are discussed and, where necessary, exemplified by key case studies. A clear statement of the current technical limitations of these methods is included and forthcoming developments, which might possibly open new horizons for dating fluvial archives in the near future, are summarised

Determining the optimal duration of the COVID-19 suppression policy: A cost-benefit analysis

Without any intervention, the novel coronavirus would cost the U.S. economy over $9 trillion.Updated May 202

Could the United States benefit from a lockdown? A cost-benefit analysis

Although COVID-19 vaccines are finally available, the rate at which they are administered is slow, and in the meantime the pandemic continues to claim about as many lives every day as the 9/11 tragedy. I estimate that with the promised rate of vaccinations, if no additional nonpharmaceutical interventions are implemented, 406 thousand additional lives will be lost and the future cost of the pandemic will reach $2.4 trillion, or 11$1.2 trillion

The Effect of Malicious Cyber Activity on the US Corporate Sector

We compile a comprehensive dataset of adverse cyber events experienced by U.S. firms. We then categorize cyber incidents by their detrimental impacts on firms' assets and operations and show that firms suffer significant value losses across multiple cyber categories. These losses also spill over to economically linked firms, thereby amplifying the negative effect of malicious cyber activity on the economy. We additionally assemble a lexicon to identify from public sources firms that possess trade secrets, work on emerging technology or critical infrastructure projects, or have government and defense contracts, and show that such firms face a higher risk of a cyber incident.Updated June 202

Inheriting Losers

We show that new managers who take over mutual fund portfolios sell off inherited momentum losers at higher rates than stocks in any other momentum decile, even after adjusting for concurrent trades in these stocks by continuing fund managers. This behavior is observed regardless of fund characteristics and is stronger when new managers are external hires. The tendency of continuing fund managers to hold on to losers could be consistent with either a behavior bias stemming from an inability to ignore the sunk costs associated with the stocks' past underperformance or a conscious desire to protect their careers by not admitting prior mistakes. Furthermore, we present evidence that selling off loser stocks helps improve fund performance. The Author 2010. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail: [email protected]., Oxford University Press.

Economic linkages inferred from news stories and the predictability of stock returns

We show that news stories contain information about economic linkages between firms and document that information diffuses slowly across linked stocks. Specifically, we identify linked stocks from co-mentions in news stories and find that linked stocks cross-predict one another's returns in the future. Our results indicate that information can flow from smaller to larger stocks and across industries. Content analysis of common news stories reveals many types of firm linkages that have not been previously studied. We find that the cross-predictability in returns remains even after firm pairs with customer-supplier ties are removed. Results show that both limited attention and slow processing of complex information contribute to slow information diffusion