Bank of Italy paper finds no evidence of asset over-valuation
Researchers look at data from eurozone, Japan and US from 1980 to 2017
A working paper published by the Bank of Italy finds no evidence of over-valuation of corporate stocks and bonds in the largest economies of the developed world since 1980.
In Assessing the risks of asset overvaluation: models and challenges, Sara Cecchetti and Marco Taboga present a model they say can compute confidence bands for the fundamental values of stocks and corporate bonds. Their methods aim at incorporating uncertainty about both future cashflows and the methods used to calculate
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