Economic puzzle
In economics, a puzzle is a situation where the implication of theory is inconsistent with observed economic data.
An example is the equity [premium puzzle], which relates to the fact that over the last two hundred years, the risk premium of stocks over bonds has been around 5.5%, much larger than expected from theory. The equity premium puzzle was first documented by Mehra and Prescot.
List of puzzles
- Consumption correlations puzzle
- Equity premium puzzle
- Equity home bias puzzle
- Excess volatility puzzle
- Feldstein-Horioka puzzle
- Forward premium anomaly
- Home bias in [trade puzzle]
- Low volatility anomaly
- Real exchange rate puzzles
- Retirement-consumption puzzle
- Missing trade puzzle, also known as Border puzzle