As a matter of fact, since 1982 the total real return on shares (the inflation-adjusted price level including reinvested dividends) has risen in Sweden at an average annual rate of around 16%. That is around two and a half times more than the trend rate since 1918. After 1982 the total real return in the United States has also been appreciably above the trend rate since 1871 (Fig. 1).1  Total annual real return on shares USA 1871-1999, index: S&P 500 1870 = 100 Sweden 1918-1999, index: normalised to 1928 level of S&P 500 1000000 USA 100000  Sweden Trend 6%  10000 1982-1999 Sweden 16% USA 15%  1000  100 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 Sources: Global Financial Data, Frennberg & Hansson, Affärsvärlden and Statistics Sweden  1  Note that the chosen initial year has consequences for the trend rate of return; the path shown in the figure should therefore be seen as an approximation. 1  BIS Review 137/1999  The price-earnings ratio for the Stockholm Exchange is currently around 30 according to Affärsvärlden. This means that the price of an average share portfolio is equivalent to around thirty times the annual earnings. The ratio in the United States is even higher, around 35 (Fig. 2).
2  All speeches are available online at www.bankofengland.co.uk/speeches  2  We’re here today to discuss with you what causes changes in the economy, how they affect people and businesses in Merseyside and across the country and the Bank of England’s role in supporting jobs and growth. The economy matters for everyone and people want to understand it better. Three quarters think there should be better education about the economy and half want a better understanding themselves but virtually no-one – just 1 in 10 – think public figures talk about economics in an accessible way. Today, we are trying to bridge that gap. We are helping to make discussions of the economy more accessible and are launching practical tools that can be used to help educate students, and indeed everyone, about the economy. This is all part of a wider effort to improve our communications. We are doing this to make the Bank more open and accountable. Quite simply, people need to understand our actions and their effects in order to hold us to account. Doing so will also make our policies more effective. Let me give you an example. Our mission was originally set out in 1694 in the Bank’s founding charter. That was to ‘promote the publick Good’ – although that sentiment was contained within a 700 word sentence, hardly clear and transparent communication. And in practice at the time what it meant was raising money to carry on a war against France.