Economics Insights @ CBS

Results from two groups of biculturals (Hong Kong undergraduates, Chinese Americans) and a group of European Americans in two studies showed that in the presence of applicable cues of a culture, individuals with expert knowledge in the culture spontaneously make inferences about the culture's moral values, producing a Stroop-like effect. Although both biculturals and European Americans made spontaneous cultural inferences from American cultural cues, only biculturals made spontaneous inferences from Chinese cultural cues.

We examine the predictive power of the dividend yield for forecasting future excess returns, cashflows, and interest rates. The ability of the dividend yield to predict excess returns is best visible at short horizons with the short rate as an additional regressor. At short horizons, the short rate strongly negatively predicts excess returns, while at long horizons, the predictive power of the dividend yield is weak. These results are robust in international data and are not due to lack of power.