Now, I would like to explore some of the research that might explain whether and, if so, how the Great Moderation affected the level of asset prices. Structural models of asset prices provide a consistent framework for understanding both equity prices and interest rates. In these models, each asset price contains a risk premium that represents the additional return demanded by risk-averse investors for bearing risk. A reduction in macroeconomic volatility that reduces uncertainty about earnings or dividends could reduce the equity risk premium and, as a result, lead to higher equity prices. Less uncertainty about future inflation could lower the risk premiums on nominal Treasury bonds, lowering the risk-free interest rate. There is, however, a potential offset as well. Lower volatility may reduce the motive for precautionary savings and thus put upward pressure on interest rates and, all else equal, downward pressure on equities.