Do equity prices reflect the ultra-low interest rate environment?

Economic Memo - February 2020 - No. 1

Authors Autrup, Søren Lejsgaard; Hensch, Jonas Ladegaard
Subject Monetary policy; Current economic and monetary trends; Economic activity and employment; Financial markets
Type Economic Memo
Year 2020
Published 27 February 2020
Abstract icon Economic Memo is a new publication series from Danmarks Nationalbank. Please, update your News service settings if you want to receive a notification when the next Economic Memo is available. The first Economic Memo shows that the equity risk premium has doubled after the financial crisis. As a result, financing costs of corporations declined less than monetary policy rates. The memo looks into explanations behind the higher premium.