Fed and Yardeni - E1/P0 or E0/P0?

CFA Level III
#1

That is the question

#2

E1/P0

#3

E1, both use the forward earnings yield.

#4

Yup, should use forward earnings yield (E1 / P0) for both the Fed Model and Yardeni Model. This measure is a real variable given that it uses current period prices.

#5

E1/P , expected earning yield