Highlights:<p>> 1. <i>In terms of total returns, residential real estate and equities have shown very similar and high real total gains, on average about 7% per year.</i> ... <i>The observation that housing returns are similar to equity returns, yet considerably less volatile, is puzzling.</i><p>> 2. <i>We find that the real safe asset return has been very volatile over the long-run, more so than one might expect, and oftentimes even more volatile than real
risky returns.</i><p>> 3. <i>...our data uncover substantial swings in the risk premium at lower frequencies that sometimes endured for decades, and which far exceed the amplitudes of business-cycle swings.</i><p>> 4. <i>Comparing returns to growth, or “r minus g” in Piketty’s notation, we uncover a striking finding. Even
calculated from more granular asset price returns data, the same fact reported in Piketty (2014) holds true for more countries and more years, and more dramatically: namely “r >> g.” ...globally, and across most countries, the weighted rate of return on capital was twice as high as the growth rate in the past 150 years.</i>