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
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From the September 7th 2019 edition
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