The S&P 500 was trading at 21.2 times earnings on December 31, 1993. On the same day, the dividend yield on the index was 2.74%, and the Treasury bond rate was 6%. The expected growth rate in real GNP was 2.5%. Assuming that the S&P 500 is correctly priced, what is the inflation rate implied in the PE ratio? (Assume stable growth and a 5.5% risk premium.)