Why is the US stock market so high – and is it justified? | Robert Shiller

It’s not the Trump effect or tax cuts. Americans seem to have a strong desire to own capital

The level of stock markets differs widely across countries. And right now, the United States is leading the world. What everyone wants to know is why – and whether its stock market’s current level is justified.

We can get a simple intuitive measure of the differences between countries by looking at price-earnings ratios. I have long advocated the cyclically adjusted price-earnings (CAPE) ratio that John Campbell (now at Harvard University) and I developed 30 years ago.

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from US news | The Guardian http://ift.tt/2F6Xtgz