The equity premium puzzle is a term coined by Rajnish Mehra and Edward C. Prescott in their study entitle "The Equity Premium: A Puzzle". It is a phenomenom not entirely understood in the financial world. Those seeking to understand the Equity Premium Puzzle are trying to determine why stocks have such higher real returns compared to government bonds.
Other countries have experienced a similar occurrence in comparing the equity returns of stocks over government bonds. Although it is not completely understood, investers continue to invest in stocks at a higher rate than government bonds and continue to see the returns in their favor.
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