Conclusion It is frustrating that we cannot offer a definitive assessment of the adequacy or otherwise of pricing for risk. Taking a long historical perspective, it is not unreasonable to claim that risk – at least aggregate economic variability – really is lower, in some important dimensions, than it was 10 or 20 years ago.
Certainly the 1970s and early 1980s – a period which deeply affected financial markets for a very long time – were themselves unusual and not a good benchmark for judging pricing. Yet notwithstanding this evidence, experienced hands almost invariably have an uneasy feeling about developments.