13 In Figure 4we have plotted stock market value as a share of national income and the sub- sequent three-year mean equity premium.This provides further conformation that historically, Market Value/National Income and 3 Year Ahead Mean Equity Premium (Averaged over time periods when MV/NI>1 and MV/NI<1) 18 2.5 16 12 1.5 70 IN/AW 0.5 0 。eg8 BSSOS B OELG8BsotoG8GR GRE BEOML OO Time Figure 4 periods of relatively high market valuation have been followed by periods when the equity premium was relatively low.13 In Figure 4we have plotted stock market value as a share of national income and the sub￾sequent three-year mean equity premium. This provides further conformation that historically, Figure 4 periods of relatively high market valuation have been followed by periods when the equity premium was relatively low. Market Value/National Income and 3 Year Ahead Mean Equity Premium (Averaged over time periods when MV/NI>1 and MV/NI<1) 0 2 4 6 8 1 0 1 2 1 4 1 6 1 8 1929 1932 1935 1938 1941 1944 1947 1950 1953 1956 1959 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 Time EP % 0 0.5 1 1.5 2 2.5 MV/NI