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Economic puzzle

From Wikipedia, the free encyclopedia

In economics, a puzzle is a situation where the implication of theory is inconsistent with observed economic data.

An example is the equity premium puzzle, which relates to the fact that over the last two hundred years, the risk premium of stocks over bonds has been around 5.5%, much larger than expected from theory. The equity premium puzzle was first documented by Mehra and Prescot (1985).

List of puzzles

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See also Category:Economic puzzles; Financial economics #Challenges and criticism.

References

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