History suggests that risk premiums fall as the perceived threat of an economic downturn progressively fades. The longer an economy expands at a solid rate, the more people are likely to project that rate forward, eroding previous caution. This is a perfectly rational response.
If people were accustomed to a three-year business cycle, they would exhibit far greater caution going into the third year of an expansion than if their normal experiences tended more to tenyear cycles. The dimensions of any expansion of course will be significantly affected by technological trends, wholly independent of people's evaluation of risk.