Given the market’s outlook for corporate earnings – as embodied, for example, in the predictions of market analysts – we make a crude estimate of the risk premium on equities as the difference between the ratio of trend earnings to price and a real long-term Treasury yield.
Calibrating the pace of withdrawal of stimulus will be no easy task. Policy will therefore need to adapt to the evolving momentum in national and global economies. Concluding remarks To sum up, the global economy is looking better than it did a year ago. The turning point was around the end of last year.