Campbell, John2009-07-222008Campbell, John Y. 2008. Estimating the equity premium. Canadian Journal of Economics 41(1): 1-21.0008-4085http://nrs.harvard.edu/urn-3:HUL.InstRepos:3196339Finance theory restricts the time-series behaviour of valuation ratios and links the cross-section of stock prices to the level of the equity premium. This can be used to strengthen the evidence for predictability in stock returns. Steady-state valuation models are useful predictors of stock returns, given the persistence in valuation ratios. A steady-state approach suggests that the world geometric average equity premium fell considerably in the late twentieth century, rose modestly in the early years of the twenty-first century, and was almost 4% at the end of March 2007.en-US10.3386/w13423