tutor2u | The rate of return on everything

Enrichment

The rate of return on everything

Geoff Riley

3rd January 2018

New research on the rate of return on different asset classes over the last 150 years published here finds that total returns on residential real estate are on a par with the returns to equities – on average, about 7% per annum – but they are far less volatile. This article will be of particular interest to students and teachers who have come across the work of Thomas Piketty and the famous r-g (the % real return on wealth - the real rate of growth).

A key takeaway from the paper is that housing returns are similar to equity returns over the very long run, but also less volatile, weakly correlated with the business cycle and less correlated across countries.

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

Recommended

Exam support for 2022

Online Grade Booster Courses for A-Level Exams in May & June 2022

Exam technique, advance information support, live revision and more from the tutor2u subject specialist teams

Enrol now

© 2002-2022 Tutor2u Limited. Company Reg no: 04489574. VAT reg no 816865400.