Why yields are the best guide to future stockmarket returns
John Cochrane’s landmark 2011 paper on discount rates
IN 2011 JOHN COCHRANE, a professor at the University of Chicago’s Booth School of Business, gave a presidential address on “Discount Rates” to the American Finance Association. It was published as a paper a few months later. In a sweeping take, Mr Cochrane set out how academics’ understanding of the way asset prices are determined has shifted over the past half-century. Many papers are described as “landmark”; this one has a better claim to the label than most.
This article appeared in the Finance & economics section of the print edition under the headline “Tales of the expected”
Finance & economics September 7th 2019
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From the September 7th 2019 edition
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Could war in the Gulf push oil to $100 a barrel?
Missiles are flying over a region that supplies a third of the world’s crude
How bond investors soured on France
They now regard the euro zone’s second-largest economy as riskier than Spain
Can Andrea Orcel, Europe’s star banker, create a super-bank?
An interview with the boss of UniCredit
Why economic warfare nearly always misses its target
There is no such thing as a strategic commodity
A tonne of public debt is never made public
New research suggests governments routinely hide their borrowing
Xi Jinping’s belated stimulus has reset the mood in Chinese markets
But can the buying frenzy last?