I was fiddling around with my spread-sheet this morning, trying to get my
mind in gear (funny what economists do!). I noticed that the ratio of
dividends to earnings on the NY stock exchange not only has shown a general
mild downward trend since 1959, but has shown a steep fall between 1992 and
2000 (more than 50%). (This ratio rose from the late 1970s until 1992,
which represents the peak in the Council of Economic Advisors data I had
available. A milder fall in the dividend/earnings ratio occurred between
1959 and 1974 or so.)
Is a fall of the dividends/earnings ratio a good measure of rising
speculation on stocks? After all, aren't earnings that don't correspond to
dividends capital gains?
Jim Devine [EMAIL PROTECTED] & http://bellarmine.lmu.edu/~jdevine
