The article discusses how to measure the equity risk premium in financial markets. Researchers use a model based on stochastic differential equations to capture the dynamic nature of the risk premium. They analyze data from Australian and U.S. markets over five years and find that the model fits well for both markets. The study shows that the market's forward-looking view on the risk premium, as indicated by option implied volatility, is a useful signal. Comparing the model's results with actual returns, they find that while the ex-post risk premia generally align with the model's estimates, there are frequent deviations, especially on the downside, suggesting that the actual risk premium may be underestimated.