On average, over time, stocks have yielded more than 4 percentage points of extra return compared to government bonds to compensate for their greater average risk. However, over the past 200 years, there have been some rare examples of long periods, such as the 1980–2010 period mentioned above, when the gap largely disappeared, or even became negative, and periods when the gap exploded out to about 10 percentage points in favor of equities, such as between 1935 and 1965. There are important structural differences in the macroeconomic backdrop that help account for these significant differences
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