Given the current state of the economy and the dramatically rising food and gas prices, do you feel the inflation rate will only average 2.5% over the next 10 years? According to the 34 participants (who are economists from industry, government, banking, and academia) in the June 2008 Livingston Survey, this will be the case. Their predictions for long-term inflation (measured by the consumer price index) continue to hold steady at 2.5%, as the number has been unchanged in the last 14 semiannual surveys dating back to December 2001. As always, please send your thoughts on this or any other Wire article to firstname.lastname@example.org.
The forecasters’ views of long-term output growth were slightly lower, as the panelists believe real GDP will grow 2.7% annually over the next 10 years, down from 2.9% in the December 2007 survey. The latest numbers from the Livingston Survey, as well as Duff & Phelps’ historical equity risk premiums, Ibbotson’s equity risk premiums and the Abbott Liquidity Factor™ can be found monthly in the Cost of Capital and Discount Metrics sections of every Business Valuation Update™ newsletter. As always, please send your thoughts on this or any other BVWire articles to email@example.com.
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