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Economic puzzle
Mismatch between economic theory and observation From Wikipedia, the free encyclopedia
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In economics, a puzzle[1][2] is a situation where the implication of theory is inconsistent with observed economic data.
 | This article needs additional citations for verification. (April 2025) |
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).
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List of puzzles
- Consumption correlations puzzle
- Equity premium puzzle
- Equity home bias puzzle
- Excess volatility puzzle
- Feldstein-Horioka puzzle
- Forward premium anomaly
- Home bias in trade puzzle
- Low volatility anomaly
- Real exchange rate puzzles
- Retirement-consumption puzzle
- Missing trade puzzle, also known as Border puzzle
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References
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