As it reflects better economic prospects, unwinding is a welcome development. But central banks are nonetheless sailing in uncharted waters. Unconventional monetary policies, including asset purchases and forward guidance, are unprecedented; changes in the use of these instruments compound uncertainty related to the eventual decision to raise policy interest rates. Authorities will no doubt withdraw monetary expansion in the most cautious way possible.
Although your papers concentrate on the equity premium, I would like to take a few minutes today to broaden the discussion to encompass risk premiums in other markets and to highlight the connections between risk premiums and monetary policy.