Student Faculty Macro Lunch -

Presentation | October 1 | 12-1 p.m. | 597 Evans Hall

 Martin Lettau, Berkeley Haas

 Clausen Center

Abstract: We provide novel evidence on the driving forces behind the sharp increase in equity values over the post-war era. From the beginning of 1989 to the end of 2017, 23 trillion dollars of real equity wealth was created by the nonfinancial corporate sector. We estimate that 54% of this increase was attributable to a reallocation of rents to shareholders in a decelerating economy. Economic growth accounts for just 24%, followed by lower interest rates (11%) and a lower risk premium (11%). From 1952 to 1988 less than half as much wealth was created, but economic growth accounted for 92% of it.

  RSVP  by September 27

 How the Wealth Was Won: Factor Shares as Market Fundamentals