>No, he didn't. He said: "Other things equal, this condition will
>involve equity discount factors high enough to bring the rise in
>asset values into line with that of household incomes, thereby
>stemming the impetus to consumption relative to income that has come
>from rising wealth."
Questions: What's the "this condition" that he's talking about?
What are the equity discount factors that he's referring to?
>Brad De Long wrote:
>If earnings are a constant share of household incomes, then all he is
>saying is that price/earnings ratios shouldn't go up any more.
>At least he didn't say that they had to go down immediately...
Is this disagreement between you and Doug about the role of earnings relative to asset prices? I mean, Brad, were you suggesting that Greenspan was suggesting that asset prices could continue to go up, as long as earnings as a share of household income went up?
All best Christian