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