If earnings in the US public corporate sector are expected to grow at a 5 percent per year real growth rate. Consistent with that, the market P/E ratio is expected to grow at 1 percent per year. Although inflation is currently low at 2 percent per year, the long-term forecast is for an inflation rate of 4 percent per year. The forward dividend yield on the market index is 1 percent. Currently the government yield curve is inverted; at the short-end, yields are 5 percent, and at 10-year maturities yields are 4 percent. Based on these forecasts, a supply side estimate of the equity risk premium as presented by The IbbotsonChen earnings model is closest to: