Working Paper: NBER ID: w12434
Authors: Rajnish Mehra
Abstract: In this article we examine the Equity Premium in the Indian context and review the related literature. The equity premium is the returned earned by a well-diversified stock portfolio in excess of that earned by a risk free security such as a Treasury Bill. Consistent with U.S. experience we find that the Indian equity premium has been quite high in the post 1991 period, averaging 9.7% above the corresponding risk free security. It is difficult to justify such a premium based on theoretical considerations. \n \nThe article is an entry prepared for the Oxford Companion to Economics in India edited by Kaushik Basu
Keywords: No keywords provided
JEL Codes: E21; G1; G12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| risk-free rate (G12) | equity premium (G12) |
| risk aversion (D81) | equity premium (G12) |
| equity returns (G12) | equity premium (G12) |
| equity returns (G12) | risk associated with equity investments (G12) |
| equity premium (G12) | risk-free rate (G12) |