Finance theory in recent years has stressed the importance of changes in the discount rate for explaining movements in stock prices. In this video, we describe how this works using data provided by Prof. Aswath Damodaran.  You can find both Damodaran’s annual paper on the equity risk premium and his calculation of the ERP for

As former US Secretary of Treasury Larry Summers has stressed, the real interest is an important indicator of the impact of Federal Reserve policy. In this short video we take a look at real interest rates through history.

Relative price changes, changes in the price of one good or service relative to others, are often confused with inflation but are fundamentally different. This difference can lead to a misunderstanding of the causes of inflation. In this video, we explain the difference and what it implies for policies to control inflation. 

The Shiller CAPE Ratio is often referenced yet at times not fully understood. In this latest installment, Prof. Bradford Cornell starts at the source and breaks down this popular metric in detail.

From the pandemic lows of March 2020 to the end of 2021, stocks had an incredible run. Earnings were up but so too were P/E ratios. As the market climbed many warned that valuations had become unjustifiably high.  With the S&P 500 down nearly 20%, P/E ratios have returned to their historic average leaving many

Download Memo as PDF Looking Back Too often financial market analysis is focused on the issue de jour – jumping from hot topic to hot topic with little reference to what was said in the past. Breaking from this tradition, this quarterly memo takes stock of what we have said in the past to provide perspective

Congrats to Senior Advisor Prof. Bradford Cornell, who along with co-author Prof. Ivo Welch, have released a new book, Global Climate Change. Global Climate Change provides a comprehensive, data driven analysis of climate change from an economic perspective. It provides a pragmatic analysis of the economic challenges and tradeoffs that must be confronted as part of the

There has been an explosion of interest in ESG investing, in part because many investors believe it leads to superior investment returns. Unfortunately, that belief does not stand up to careful scrutiny as we explain in this latest episode.

Elon Musk recently proposed a buyout of Twitter at 54.20 per share. Twitter stock traded over 50 following the news but in recent weeks the stock has dwindled. What can we infer from Twitter’s stock price about the possibility of Musk’s completing his acquisition of Twitter?

Recent times have been dreadful for investors especially for holders of growth and tech stocks (See “The Crash of the High Fliers”) . Many are waiting for signs of an upturn. Do a few big up days mean the carnage is over?