@article {Siegel10, author = {Jeremy J. Siegel}, title = {The Shrinking Equity Premium}, volume = {26}, number = {1}, pages = {10--17}, year = {1999}, doi = {10.3905/jpm.1999.319776}, publisher = {Institutional Investor Journals Umbrella}, abstract = {The author argues that the equity premium or the historical spread between expected equity returns and government bond yields is probably far below the approximately 6\% figure estimated in much of the finance literature. This, the author contends, is due both to an underestimate of the expected real return on the risk-free asset and an overestimate of the realized returns on equities. Correction of these biases reduces the equity premium to 1\% to 2\% per year. Furthermore, given the current high level of equity prices relative to earnings and high yield on government price-indexed bonds, it is extremely unlikely that the future premium will exceed the 1\% to 2\% range without an unprecedented increase in earnings growth.}, issn = {0095-4918}, URL = {https://jpm.pm-research.com/content/26/1/10}, eprint = {https://jpm.pm-research.com/content/26/1/10.full.pdf}, journal = {The Journal of Portfolio Management} }