New Evidence Reveals Negative Equity Premium, Challenging Traditional Economic Models.
The study found that traditional ways of measuring U.S. consumption growth have limitations, leading to an incorrect estimate of how much it changes over time. By using new measures, researchers discovered that consumption growth is actually more predictable than previously thought. This new evidence suggests that certain economic models may not accurately predict the returns on investments, making the puzzle of why stocks have higher returns than safer investments even more confusing.