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A major issue in financial economics is the behaviour of stock returns over long as opposed to short horizons. This paper looks at the relationship between continuously compounded nominal returns and inflation over both short and long horizons. Using over two centuries of annual data for Ireland, this paper finds support for the Generalized Fisher Hypothesis; namely that real stock returns are independent of expected inflation over the long run, and a positive relationship between ex post long-horizon nominal stock returns and inflation.
