So sorry that it has taken me so long to respond to your question. My apologies.
In my own work on the equity risk premium I use Robert Shiller's P/E ratio for the S&P 500. He adjusts earnings by backing out one-time accounting items and by smoothing earnings over long time periods of ~10 years. This helps to dampen some of the natural cyclicality and volatility of financial markets.
Hi Mohammed,
So sorry that it has taken me so long to respond to your question. My apologies.
In my own work on the equity risk premium I use Robert Shiller's P/E ratio for the S&P 500. He adjusts earnings by backing out one-time accounting items and by smoothing earnings over long time periods of ~10 years. This helps to dampen some of the natural cyclicality and volatility of financial markets.
I hope that helps to answer your question.
With smiles,
Jason