The Canadian bond market contains valuable information about the future real economic growth. These forecasts, which are based on a simple asset-pricing theory, are more accurate than the ones based on time-series models and compare favorably with professional forecasts. Significantly, the term...

We propose an exogenous measure of a country's growth opportunities by interacting the country's local industry mix with global price to earnings ("PE") ratios. We find that these exogenous growth opportunities predict future changes in real GDP and investment in a large panel of countries. This...