NBER WORKING PAPER SERIES
THE EQUITY PREMIUM IN RETROSPECT
Rajnish Mehra
Edward C. Prescott
Working Paper9525
https://www.doczj.com/doc/7819114943.html,/papers/w9525
NATIONAL BUREAU OF ECONOMIC RESEARCH
1050 Massachusetts Avenue
Cambridge, MA 02138
February 2003
Forthcoming in the Handbook of the Economics of Finance, edited by G.M Contantinides, M. Harris and R. Stulz, North Holland, Amsterdam. We thank George Constantinides, John Donaldson, Ellen R. McGrattan and Mark Rubinstein for helpful discussions. Mehra acknowledges financial support from the Academic Senate of the University of California. Prescott acknowledges financial support from the National Science Foundation. The views expressed herein are those of the author and not necessarily those of the National Bureau of Economic Research.
?2003 by Rajnish Mehra and Edward C. Prescott. All rights reserved. Short sections of text not to exceed two paragraphs, may be quoted without explicit permission provided that full credit including ?notice, is given to the source.
The Equity Premium in Retrospect
Rajnish Mehra and Edward C. Prescott
NBER Working Paper No. 9525
February 2003
JEL No. D91, E2, E60, G0, G11, G12, G13, H2, H55
ABSTRACT
This article takes a critical look at the literature on equity premium puzzle - the inability of standard intertemporal economic models to rationalize the statistics that have characterized U.S. financial markets over the past century. A summary of historical returns for the United States and other industrialized countries and an overview of the economic construct itself are provided. The intuition behind the discrepancy between model prediction and empirical data is explained and the research efforts to enhance the model’s ability to replicate the empirical data are summarized.
Rajnish Mehra Edward C. Prescott
Department of Economics Research Department
University of California Federal Reserve Bank of Minneapolis
Santa Barbara, CA 9310690 Hennepin Avenue
and NBER Minneapolis, MN 55480
mehra@https://www.doczj.com/doc/7819114943.html, and NBER
prescott@https://www.doczj.com/doc/7819114943.html,
More than two decades ago, we demonstrated that the equity premium (the return earned by a risky security in excess of that earned by a relatively risk-free T-bill), was an order of mag-nitude greater than could be rationalized in the context of the standard neoclassical paradigms of financial economics as a premium for bearing risk. We dubbed this historical regularity ‘the eq-uity premium puzzle.’(Mehra and Prescott(1985)). Our challenge to the profession has spawned a plethora of research efforts to explain it away.
In this paper, we take a retrospective look at the puzzle, critically examine the data sources used to document the puzzle, attempt to clearly explain it and evaluate the various at-tempts to solve it. The paper is organized into four parts. Part 1 documents the historical equity premium in the United States and in selected countries with significant capital markets in terms of market value and comments on the data sources.Part 2 examines the question, ‘Is the equity premium due to a premium for bearing non-diversifiable risk?’ Part 3 examines the related ques-tion, ‘Is the equity premium due to borrowing constraints, a liquidity premium or taxes?’Finally, part 4 examines the equity premium expected to prevail in the future.
We conclude that research to date suggests that the answer to the first question is ‘no’, unless one is willing to accept that individuals are implausibly risk averse. In answer to the sec-ond question McGratten and Prescott (2001) found that, most likely, the high equity premium observed in the postwar period was indeed the result of a combination of the factors that included borrowing constraints and taxes.
1.1 Facts
Any discussion of the equity premium over time confronts the question of which average returns are more useful in summarizing historical information: arithmetic or geometric? It is well
known that the arithmetic average return exceeds the geometric average return and that if the re-turns are log-normally distributed, the difference between the two is one-half the variance of the returns. Since the annual standard deviation of the equity premium is about 20 percent, this can result in a difference of about 2 percent between the two measures, which is non - trivial since the phenomena under consideration has an arithmetic mean of between 2 and 8 percent. In Mehra and Prescott (1985), we reported arithmetic averages, since the best available evidence indicated that stock returns were uncorrelated over time. When this is the case, the expected future value of a $1 investment is obtained by compounding the arithmetic average of the sample return, which is the correct statistic to report if one is interested in the mean value of the investment.1 If, how-ever, the objective is to obtain the median future value of the investment, then the initial invest-ment should be compounded at the geometric sample average. When returns are serially corre-lated, then the arithmetic average2 can lead to misleading estimates and thus the geometric aver-age may be the more appropriate statistic to use. In this paper, as in our 1985 paper, we report arithmetic averages. However, in instances where we cite the results of research when arithmetic averages are not available, we clearly indicate this.3
1.2 Data Sources
A second crucial consideration in a discussion of the historical equity premium has to do with the reliability of early data sources. The data documenting the historical equity premium in the United States can be subdivided into three distinct sub-periods, 1802–1871, 1871–1926 and
1 We present a simple proof in appendix A.
2 The point is well illustrated by the textbook example where an initial investment of $100 is worth $200 after one year and $100 after two years. The arithmetic average return is 25% whereas the geometric average return is 0%. The latter coincides with the true return.
3 In this case an approximate estimate of the arithmetic average return can be obtained by adding one-half the variance of the returns to the geometric average.
1926 – present. The quality of the data is very different for each subperiod. Data on stock prices for the nineteenth century is patchy, often necessarily introducing an element of arbitrariness to compensate for its incompleteness.
Subperiod 1802-1871
Equity Return Data
We find that the equity return data prior to 1871 is not particularly reliable. To the best of our knowledge, the stock return data used by all researchers for the period 1802–1871 is due to Schwert (1990), who gives an excellent account of the construction and composition of early stock market indexes. Schwert (1990) constructs a “spliced” index for the period 1802–1987; his index for the period 1802–1862 is based on the work of Smith and Cole (1935), who constructed a number of early stock indexes. For the period 1802–1820, their index was constructed from an equally weighted portfolio of seven bank stocks, while another index for 1815–1845 was com-posed of six bank stocks and one insurance stock. For the period 1834–1862 the index consisted of an equally weighted portfolio of (at most) 27 railroad stocks.4 They used one price quote, per stock, per month, from local newspapers. The prices used were the average of the bid and ask prices, rather than transaction prices, and their computation of returns ignores dividends. For the period 1863–1871, Schwert uses data from Macaulay (1938), who constructed a value-weighted index using a portfolio of about 25 North-east and mid-Atlantic railroad stocks;5 this index also excludes dividends. Needless to say, it is difficult to assess how well this data proxies the ‘mar-ket,’ since undoubtedly there were other industry sectors that were not reflected in the index.
4 “They chose stocks in hindsight … the sample selection bias caused by including only stocks that survived and were actively quoted for the whole period is obvious.” (Schwert (1990))
5 “It is unclear what sources Macaulay used to collect individual stock prices but he included all railroads with actively traded stocks.” Ibid
Return on a Risk-free Security
Since there were no Treasury bills at the time, researchers have used the data set con-structed by Siegel (1998) for this period, using highly rated securities with an adjustment for the default premium. It is interesting to observe, as mentioned earlier, that based on this data set the equity premium for the period 1802–1862 was zero. We conjecture that this may be due to the fact that since most financing in the first half of the nineteenth century was done through debt, the distinction between debt and equity securities was not very clear-cut.6
Sub-period 1871–1926
Equity Return Data
Shiller (1989) is the definitive source for the equity return data for this period. His data is based on the work of Cowles (1939), which covers the period 1871–1938. Cowles used a value-weighted portfolio for his index, which consisted of 12 stocks7 in 1871 and ended with 351 in 1938. He included all stocks listed on the New York Stock Exchange, whose prices were re-ported in the Commercial and Financial Chronicle. From 1918 onward he used the Standard and Poor’s (S&P) industrial portfolios. Cowles reported dividends, so that, unlike the earlier indexes for the period 1802–1871, a total return calculation was possible.
Return on a Risk Free Security
There is no definitive source for the short-term risk-free rate in the period before 1920, when Treasury certificates were first issued. In our 1985 study, we used short-term commercial
6 The first actively traded stock was floated in the U.S in 1791 and by 1801 there were over 300 corporations, although less than 10 were actively traded. ( Siegel (1998)).
7 It was only from Feb. 16, 1885, that Dow Jones began reporting an index, initially composed of 12 stocks. The S&P index dates back to 1928, though for the period 1928–1957 it consisted of 90 stocks. The S&P 500 debuted in March 1957.
paper as a proxy for a riskless short-term security prior to 1920 and Treasury certificates from 1920–1930. Our data prior to 1920, was taken from Homer (1963). Most researchers have either used our data set or Siegel’s.
Sub-period 1926–present
Equity Return Data
This period is the “Golden Age” in regards to accurate financial data. The NYSE data-base at the Center for Research in Security Prices (CRSP) was initiated in 1926 and provides re-searchers with high quality equity return data. The Ibbotson Associates Yearbooks8 are also a very useful compendium of post–1926 financial data.
Return on a Risk-free Security
Since the advent of Treasury bills in 1931, short maturity bills have been an excellent proxy for a “real” risk-free security since the innovation in inflation is orthogonal to the path of real GNP growth.9 Of course, with the advent of Treasury Inflation Protected Securities (TIPS) on January 29, 1997, the return on these securities is the real risk-free rate.
1.3 Estimates of the Equity Premium
Historical data provides us with a wealth of evidence documenting that for over a cen-tury, stock returns have been considerably higher than those for Treasury-bills. This is illustrated in Table 1, which reports the unconditional estimates10 for the US equity premium based on the
8 Ibbotson Associates. “Stocks, Bonds, Bills and Inflation.” 2000 Yearbook. Chicago. Ibbotson Associates. 2001.
9 See Litterman (1980) who also found that that in post war data the innovation in inflation had a standard deviation of one half of one percent.
10 To obtain unconditional estimates we use the entire data set to form our estimate. The Mehra-Prescott data set covers the long-est time period for which both consumption and stock return data is available. The former is necessary to test the implication of consumption based asset pricing models.
various data sets used in the literature, going back to 1802. The average annual real return, (the inflation adjusted return) on the U.S. stock market over the last 110 years has been about 8.06 percent. Over the same period, the return on a relatively riskless security was a paltry 1.14 per-cent. The difference between these two returns, the “equity premium,” was 6.92 percent.
Furthermore, this pattern of excess returns to equity holdings is not unique to the U.S. but is observed in every country with a significant capital market. The U.S. together with the U.K., Japan, Germany and France accounts for more than 85 percent of the capitalized global equity value.
The annual return on the British stock market was 5.7 percent over the post war period, an impressive 4.6 percent premium over the average bond return of 1.1 percent. Similar statisti-cal differentials are documented for France, Germany and Japan. Table 2 illustrates the equity premium in the post war period for these countries.
Table 1
U.S. Equity Premium Using Different Data Sets
Data Set% real return on a
market index % real return on a relatively
riskless security
% equity pre-
mium
Mean Mean Mean 1802-1998
(Siegel)
7.0 2.9 4.1
1871-199
(Shiller)
6.99 1.74 5.75
1889-2000
(Mehra-Prescott)
8.06 1.14 6.92
1926-2000
(Ibbotson)
8.80.48.4
Table 2
Equity Premium in Different Countries
Country% real return
on a market
index % real return on a relatively
riskless security
% equity pre-
mium
Mean Mean Mean UK
(1947-1999)
5.7 1.1 4.6
Japan
(1970-1999)
4.7 1.4 3.3
Germany
(1978-1997)
9.8 3.2 6.6
France
(1973-1998)
9.0 2.7 6.3
Source: U.K from Siegel (1998), the rest are from Campbell (2001)
The dramatic investment implications of this differential rate of return can be seen in
Table 3, which maps the capital appreciation of $1 invested in different assets from 1802 to 1997 and from 1926 to 2000.
Table 3
Terminal value of $1 invested in Stocks and Bonds
Investment Period Stocks T-bills
Real Nominal Real Nominal 1802-1997$558,945$7,470,000$276$3,679
1926-2000$266.47$2,586.52$1.71$16.56
Source: Ibbotson (2001) and Siegel (1998)
As Table 3 illustrates, $1 invested in a diversified stock index yields an ending wealth of $558,945 versus a value of $276, in real terms, for $1 invested in a portfolio of T-bills for the period 1802–1997. The corresponding values for the 75-year period, 1926–2000, are $266.47 and $1.71. We assume that all payments to the underlying asset, such as dividend payments to
stock and interest payments to bonds are reinvested and that there are no taxes paid.
This long-term perspective underscores the remarkable wealth building potential of the equity premium. It should come as no surprise therefore, that the equity premium is of central importance in portfolio allocation decisions, estimates of the cost of capital and is front and cen-ter in the current debate about the advantages of investing Social Security funds in the stock market.
In Table 4 we report the premium for some interesting sub-periods: 1889–1933, when the United States was on a gold standard; 1933–2000, when it was off the gold standard; and
1946–2000, the postwar period. Table 5 presents 30 year moving averages, similar to those re-ported by the US meteorological service to document ‘normal’ temperature.
Table 4
Equity Premium in Different Sub-Periods
Time Period% real return
on a market
index % real return on a relatively
riskless security
% equity pre-
mium
Mean Mean Mean 1889–19337.01 3.09 3.92 1934–20008.76-0.178.93 1946–20009.030.688.36
Source: Mehra and Prescott (1985). Updated by the authors.
Table 5
Equity Premium: 30 Year Moving Averages
Time Period% real return
on a market
index % real return on a relatively
riskless security
% equity pre-
mium
Mean Mean Mean 1900–1950 6.51 2.01 4.50
1951–20008.98 1.417.58
Source: Mehra and Prescott (1985). Updated by the authors
Although the premium has been increasing over time, this is largely due to the diminish-ing return on the riskless asset, rather than a dramatic increase in the return on equity, which has been relatively constant. The low premium in the nineteenth centaury is largely due to the fact that the equity premium for the period 1802–1861 was zero.11 If we exclude this period, we find that difference in the premium in the second half of the nineteenth century relative to average values in the twentieth century is less striking.
We find a dramatic change in the equity premium in the post 1933 period – the premium rose from 3.92 percent to 8.93 percent, an increase of more than 125 percent. Since 1933 marked the end of the period when the US was on the gold standard, this break can be seen as the change in the equity premium after the implementation of the new policy.
1.4 Variation in the Equity Premium over Time
The equity premium has varied considerably over time, as illustrated in Figures 1 and 2, below. Furthermore, the variation depends on the time horizon over which it is measured. There
11 See the earlier discussion on data.
have even been periods when it has been negative.
Figure 1
Figure 2
Source: Ibbotson 2001
The low frequency variation has been counter- cyclical. This is shown in Figure 3 where we have plotted stock market value as a share of national income12 and the mean equity premium averaged over certain time periods. We have divided the time period from 1929 to 2000 into sub-periods, where the ratio market value of equity to national income was greater than 1 and where it was less than 1. Historically, as the figure illustrates, subsequent to periods when this ratio was
12 In Mehra (1998) it is argued that the variation in this ratio is difficult to rationalize in the standard neoclassical framework since over the same period after tax cash flows to equity as a share of national income are fairly constant. Here we do not address
high the realized equity premium was low. A similar results holds when stock valuations are low relative to national income. In this case the subsequent equity premium is high.
Since After Tax Corporate Profits as a share of National Income are fairly constant over
Figure 3
time, this translates into the observation that the realized equity premium was low subse-quent to periods when the Price/ Earnings ratio is high and vice versa. This is the basis for the returns predictability literature in Finance. (Campbell and Shiller (1988) and Fama and French (1988)).
this issue and simply utilize the fact that this
ratio has varied considerably over time.
Market Value/National Inc ome and Mean Equity Premium (Averaged over time periods when MV/NI>1 and MV/NI<1)
02
4
6
8
10
12
14
1929
1931
1933
1935
1937
1939
1941
1943
1945
1947
1949
1951
1953
1955
1957
1959
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
T i m e
0.5
1
1.5
2
2.5
In Figure 4we have plotted stock market value as a share of national income and the sub-sequent three-year mean equity premium. This provides further conformation that historically,
Figure 4
periods of relatively high market valuation have been followed by periods when the
equity premium was relatively low.
Market Value/National Inc ome and 3 Year Ahead Mean Equity Premium
(Averaged over time periods when MV/NI>1 and MV/NI<1)
02
4
6
8
10
12
14
16
1819
29
19
32
19
35
19
38
19
41
19
44
19
47
19
50
19
53
19
56
19
59
19
62
19
65
19
68
19
71
19
74
19
77
19
80
19
83
19
86
19
89
19
92
19
95
19
98
T i m e
E P %
0.5
1
1.5
2
2.5
M V /N I
2. Is The Equity Premium Due To A Premium For Bearing Non-
diversifiable Risk?
In this section, we examine various models that attempt to explain the historical equity premium. We start with a model with standard (CRRA) preferences, then examine models incor-porating alternative preference structures, idiosyncratic and uninsurable income risk, and models incorporating a disaster state and survivorship bias.
Why have stocks been such an attractive investment relative to bonds? Why has the rate of return on stocks been higher than on relatively risk-free assets? One intuitive answer is that since stocks are ‘riskier’ than bonds, investors require a larger premium for bearing this addi-tional risk; and indeed, the standard deviation of the returns to stocks (about 20 percent per an-num historically) is larger than that of the returns to T-bills (about 4 percent per annum), so, ob-viously they are considerably more risky than bills! But are they?
Figures 5 and 6 below illustrate the variability of the annual real rate of return on the
S&P 500 index and a relatively risk-free security over the period 1889–2000.Of course, the index did not consist of 500 stocks for the entire period.
Real Annual Return on S&P 500, 1889-2000 (perc ent)
-60
-40
-20
20
40
60
18
8Y e a r
P e r c e n t
Source: Mehra and Prescott (1985). Data updated by the authors.
Figure 5
Real Annual Return on a Relatively Riskless Sec urity, 1889-2000 (perc ent)
-20
-15
-10
-5
5
10
15
20
18
8Y e a r
P e r c e n t
Source: Mehra and Prescott (1985). Data updated by the authors.
Figure 6
To enhance and deepen our understanding of the risk-return trade-off in the pricing of financial assets, we take a detour into modern asset pricing theory and look at why different assets yield different rates of return. The deus ex machina of this theory is that assets are priced such that, ex-ante, the loss in marginal utility incurred by sacrificing current consumption and buying an asset at a certain price is equal to the expected gain in marginal utility, contingent on the anticipated increase in consumption when the asset pays off in the future.
The operative emphasis here is the incremental loss or gain of utility of consumption and
should be differentiated from incremental consumption. This is because the same amount of con-
sumption may result in different degrees of well-being at different times. As a consequence, as-sets that pay off when times are good and consumption levels are high – when the marginal util-ity of consumption is low – are less desirable than those that pay off an equivalent amount when times are bad and additional consumption is more highly valued. Hence consumption in period t has a different price if times are good than if times are bad.
Let us illustrate this principle in the context of the standard, popular paradigm, the Capi-tal Asset Pricing Model (CAPM). The model postulates a linear relationship between an asset’s ‘beta,’ a measure of systematic risk, and its expected return. Thus, high-beta stocks yield a high expected rate of return. That is because in the CAPM, good times and bad times are captured by the return on the market. The performance of the market, as captured by a broad-based index, acts as a surrogate indicator for the relevant state of the economy. A high-beta security tends to pay off more when the market return is high – when times are good and consumption is plentiful; it provides less incremental utility than a security that pays off when consumption is low, is less valuable and consequently sells for less. Thus higher beta assets that pay off in states of low marginal utility will sell for a lower price than similar assets that pay off in states of high mar-ginal utility. Since rates of return are inversely proportional to asset prices, the lower beta assets will, on average, give a lower rate of return than the former.
Another perspective on asset pricing emphasizes that economic agents prefer to smooth patterns of consumption over time. Assets that pay off a larger amount at times when consump-tion is already high “destabilize” these patterns of consumption, whereas assets that pay off when consumption levels are low “smooth” out consumption. Naturally, the latter are more valuable and thus require a lower rate of return to induce investors to hold these assets. (Insurance policies are a classic example of assets that smooth consumption. Individuals willingly purchase and hold
them, despite of their very low rates of return).
To return to the original question: are stocks that much riskier than T-bills so as to justify a six percentage differential in their rates of return?
What came as a surprise to many economists and researchers in finance was the conclu-sion of a paper by Mehra and Prescott, written in 1979. Stocks and bonds pay off in approxi-mately the same states of nature or economic scenarios and hence, as argued earlier, they should command approximately the same rate of return. In fact, using standard theory to estimate risk-adjusted returns, we found that stocks on average should command, at most, a one percent return premium over bills. Since, for as long as we had reliable data (about 100 years), the mean pre-mium on stocks over bills was considerably and consistently higher, we realized that we had a puzzle on our hands. It took us six more years to convince a skeptical profession and for our pa-per “The Equity Premium: A Puzzle” to be published. (Mehra and Prescott (1985)).
2.1 Standard Preferences
The neoclassical growth model and its stochastic variants are a central construct in con-temporary finance, public finance, and business cycle theory. It has been used extensively by, among others, Abel et al. (1989), Auerbach and Kotlikoff (1987), Barro and Becker (1988), Brock (1979), Cox, Ingersoll and Ross (1985), Donaldson and Mehra (1984), Lucas (1978), Kydland and Prescott (1982), and Merton (1971). In fact, much of our economic intuition is de-rived from this model class. A key idea of this framework is that consumption today and con-sumption in some future period are treated as different goods. Relative prices of these different goods are equal to people’s willingness to substitute between these goods and businesses’ ability to transform these goods into each other.
The model has had some remarkable successes when confronted with empirical data,particularly in the stream of macroeconomic research referred to as Real Business Cycle Theory,where researchers have found that it easily replicates the essential macroeconomic features of the business cycle. See, in particular, Kydland and Prescott (1982). Unfortunately, when confronted
with financial market data on stock returns, tests of these models have led, without exception, to their rejection. Perhaps the most striking of these rejections is contained in our 1985 paper.
To illustrate this we employ a variation of Lucas' (1978) pure exchange model. Since per capita consumption has grown over time, we assume that the growth rate of the endowment fol-lows a Markov process. This is in contrast to the assumption in Lucas' model that the endowment level follows a Markov process. Our assumption, which requires an extension of competitive equilibrium theory 13, enables us to capture the non-stationarity in the consumption series associ-ated with the large increase in per capita consumption that occurred over the last century.
We consider a frictionless economy that has a single representative 'stand-in' household.
This unit orders its preferences over random consumption paths by
E U c t t t 0001b b =???ìó?
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<<(), (1)
where c t is the per capita consumption and the parameter b is the subjective time discount factor,which describes how impatient households are to consume. If b is small, people are highly im-patient, with a strong preference for consumption now versus consumption in the future. As modeled, these households live forever, which implicitly means that the utility of parents de-pends on the utility of their children. In the real world, this is true for some people and not for others. However, economies with both types of people—those who care about their children’s
The way 的用法 Ⅰ常见用法： 1)the way+ that 2)the way + in which（最为正式的用法） 3)the way + 省略（最为自然的用法） 举例：I like the way in which he talks. I like the way that he talks. I like the way he talks. Ⅱ习惯用法： 在当代美国英语中，the way用作为副词的对格，“the way+ 从句”实际上相当于一个状语从句来修饰整个句子。 1)The way =as I am talking to you just the way I’d talk to my own child. He did not do it the way his friends did. Most fruits are naturally sweet and we can eat them just the way they are—all we have to do is to clean and peel them. 2）The way= according to the way/ judging from the way The way you answer the question, you are an excellent student. The way most people look at you, you’d think trash man is a monster. 3）The way =how/ how much No one can imagine the way he missed her. 4）The way =because
The way的用法及其含义（二） 二、the way在句中的语法作用 the way在句中可以作主语、宾语或表语： 1.作主语 The way you are doing it is completely crazy.你这个干法简直发疯。 The way she puts on that accent really irritates me. 她故意操那种口音的样子实在令我恼火。The way she behaved towards him was utterly ruthless. 她对待他真是无情至极。 Words are important, but the way a person stands, folds his or her arms or moves his or her hands can also give us information about his or her feelings. 言语固然重要,但人的站姿,抱臂的方式和手势也回告诉我们他(她)的情感。 2.作宾语 I hate the way she stared at me.我讨厌她盯我看的样子。 We like the way that her hair hangs down.我们喜欢她的头发笔直地垂下来。 You could tell she was foreign by the way she was dressed. 从她的穿著就可以看出她是外国人。 She could not hide her amusement at the way he was dancing. 她见他跳舞的姿势，忍俊不禁。 3.作表语 This is the way the accident happened.这就是事故如何发生的。 Believe it or not, that's the way it is. 信不信由你, 反正事情就是这样。 That's the way I look at it, too. 我也是这么想。 That was the way minority nationalities were treated in old China. 那就是少数民族在旧中
定冠词the的用法： 定冠词the与指示代词this ,that同源,有“那(这)个”的意思,但较弱,可以和一个名词连用,来表示某个或某些特定的人或东西. (1)特指双方都明白的人或物 Take the medicine.把药吃了. (2)上文提到过的人或事 He bought a house.他买了幢房子. I've been to the house.我去过那幢房子. (3)指世界上独一无二的事物 the sun ,the sky ,the moon, the earth (4)单数名词连用表示一类事物 the dollar 美元 the fox 狐狸 或与形容词或分词连用,表示一类人 the rich 富人 the living 生者 (5)用在序数词和形容词最高级,及形容词等前面 Where do you live?你住在哪? I live on the second floor.我住在二楼. That's the very thing I've been looking for.那正是我要找的东西. (6)与复数名词连用,指整个群体 They are the teachers of this school.(指全体教师) They are teachers of this school.(指部分教师) (7)表示所有,相当于物主代词,用在表示身体部位的名词前 She caught me by the arm.她抓住了我的手臂. (8)用在某些有普通名词构成的国家名称,机关团体,阶级等专有名词前 the People's Republic of China 中华人民共和国 the United States 美国 (9)用在表示乐器的名词前 She plays the piano.她会弹钢琴. (10)用在姓氏的复数名词之前,表示一家人 the Greens 格林一家人(或格林夫妇) (11)用在惯用语中 in the day, in the morning... the day before yesterday, the next morning... in the sky... in the dark... in the end... on the whole, by the way...
“tｈｅwａｙ+从句”结构的意义及用法 首先让我们来看下面这个句子: Ｒead the foｌloｗｉnｇpassagｅａnd talkａbout ｉt wi ｔh your classmaｔes．Try tｏｔeｌl whaｔyｏu thiｎk ｏf Tom aｎd ｏｆｔhe ｗay the chiｌｄrenｔrｅated ｈim. 在这个句子中，ｔhe waｙ是先行词,后面是省略了关系副词that或in whｉch的定语从句。 下面我们将叙述“the ｗaｙ+从句”结构的用法。 1.tｈe wａy之后，引导定语从句的关系词是tｈat而不是hoｗ,因此，<<现代英语惯用法词典＞＞中所给出的下面两个句子是错误的：Ｔhｉs is ｔｈeｗayｈowｉtｈａppened. This is the way how he ａlwａｙs treats me. 2．在正式语体中,thaｔ可被in which所代替;在非正式语体中，ｔhat则往往省略。由此我们得到theｗay后接定语从句时的三种模式：1) tｈe ｗaｙ＋ｔhａt-从句２）the way +ｉn whiｃh－从句3) the ｗay +从句 例如：Ｔｈe way(in whiｃh ，thａt) ｔhｅｓｅｃomｒade ｓloｏｋａｔｐrobｌems is wrong．这些同志看问题的方法
不对。 Ｔｈｅｗａy(that ,ｉn ｗhiｃh)yoｕ’ｒe doinｇit is comple ｔeｌy crａzy.你这么个干法,简直发疯。 Wｅａdmiｒｅd him for thｅｗay ｉｎｗhｉch he fａｃeｓdiｆficultieｓ． Waｌlａｃe ａｎd Ｄarwiｎｇreed ｏn the way ｉｎwhi ｃh ｄｉfｆｅrｅnt forms ｏf life had ｂegｕn.华莱士和达尔文对不同类型的生物是如何起源的持相同的观点。 Thｉs is ｔｈe ｗaｙ（tｈａｔ) hｅdｉd it. I lｉkeｄｔhe waｙ(ｔhat) ｓｈeｏｒganized ｔhe ｍeetｉng． 3.theｗay(tｈat)有时可以与hｏw(作“如何”解）通用。例如： That’s tｈe ｗaｙ(tｈaｔ) shｅspoke. = Tｈat’s how shｅspoke.
表示“方式”、“方法”，注意以下用法： 1.表示用某种方法或按某种方式，通常用介词in(此介词有时可省略)。如： Do it (in) your own way. 按你自己的方法做吧。 Please do not talk (in) that way. 请不要那样说。 2.表示做某事的方式或方法，其后可接不定式或of doing sth。 如： It’s the best way of studying [to study] English. 这是学习英语的最好方法。 There are different ways to do [of doing] it. 做这事有不同的办法。 3.其后通常可直接跟一个定语从句(不用任何引导词)，也可跟由that 或in which 引导的定语从句，但是其后的从句不能由how 来引导。如： 我不喜欢他说话的态度。 正：I don’t like the way he spoke. 正：I don’t like the way that he spoke. 正：I don’t like the way in which he spoke. 误：I don’t like the way how he spoke. 4.注意以下各句the way 的用法： That’s the way (=how) he spoke. 那就是他说话的方式。 Nobody else loves you the way(=as) I do. 没有人像我这样爱你。 The way (=According as) you are studying now, you won’tmake much progress. 根据你现在学习情况来看，你不会有多大的进步。 2007年陕西省高考英语中有这样一道单项填空题： ——I think he is taking an active part insocial work. ——I agree with you_____. A、in a way B、on the way C、by the way D、in the way 此题答案选A。要想弄清为什么选A，而不选其他几项，则要弄清选项中含way的四个短语的不同意义和用法，下面我们就对此作一归纳和小结。 一、in a way的用法 表示：在一定程度上，从某方面说。如： In a way he was right.在某种程度上他是对的。注：in a way也可说成in one way。 二、on the way的用法 1、表示：即将来(去)，就要来(去)。如： Spring is on the way.春天快到了。 I'd better be on my way soon.我最好还是快点儿走。 Radio forecasts said a sixth-grade wind was on the way.无线电预报说将有六级大风。 2、表示：在路上，在行进中。如： He stopped for breakfast on the way.他中途停下吃早点。 We had some good laughs on the way.我们在路上好好笑了一阵子。 3、表示：(婴儿)尚未出生。如： She has two children with another one on the way.她有两个孩子，现在还怀着一个。 She's got five children，and another one is on the way.她已经有5个孩子了，另一个又快生了。 三、by the way的用法
The way的用法及其含义（一） 有这样一个句子：In 1770 the room was completed the way she wanted. 1770年，这间琥珀屋按照她的要求完成了。 the way在句中的语法作用是什么？其意义如何？在阅读时，学生经常会碰到一些含有the way 的句子，如：No one knows the way he invented the machine. He did not do the experiment the way his teacher told him.等等。他们对the way 的用法和含义比较模糊。在这几个句子中，the way之后的部分都是定语从句。第一句的意思是，“没人知道他是怎样发明这台机器的。”the way的意思相当于how；第二句的意思是，“他没有按照老师说的那样做实验。”the way 的意思相当于as。在In 1770 the room was completed the way she wanted.这句话中，the way也是as的含义。随着现代英语的发展，the way的用法已越来越普遍了。下面，我们从the way的语法作用和意义等方面做一考查和分析： 一、the way作先行词，后接定语从句 以下3种表达都是正确的。例如：“我喜欢她笑的样子。” 1. the way+ in which +从句 I like the way in which she smiles. 2. the way+ that +从句 I like the way that she smiles. 3. the way + 从句(省略了in which或that) I like the way she smiles. 又如：“火灾如何发生的，有好几种说法。” 1. There were several theories about the way in which the fire started. 2. There were several theories about the way that the fire started.
way 的用法 【语境展示】 1. Now I’ll show you how to do the experiment in a different way. 下面我来演示如何用一种不同的方法做这个实验。 2. The teacher had a strange way to make his classes lively and interesting. 这位老师有种奇怪的办法让他的课生动有趣。 3. Can you tell me the best way of working out this problem? 你能告诉我算出这道题的最好方法吗？ 4. I don’t know the way (that / in which) he helped her out. 我不知道他用什么方法帮助她摆脱困境的。 5. The way (that / which) he talked about to solve the problem was difficult to understand. 他所谈到的解决这个问题的方法难以理解。 6. I don’t like the way that / which is being widely used for saving water. 我不喜欢这种正在被广泛使用的节水方法。 7. They did not do it the way we do now. 他们以前的做法和我们现在不一样。 【归纳总结】 ●way作“方法，方式”讲时，如表示“以……方式”，前面常加介词in。如例1； ●way作“方法，方式”讲时，其后可接不定式to do sth.，也可接of doing sth. 作定语，表示做某事的方法。如例2，例3；
t h e-w a y-的用法
The way 的用法 "the way+从句"结构在英语教科书中出现的频率较高, the way 是先行词, 其后是定语从句.它有三种表达形式:1) the way+that 2)the way+ in which 3)the way + 从句(省略了that或in which),在通常情况下, 用in which 引导的定语从句最为正式,用that的次之,而省略了关系代词that 或 in which 的, 反而显得更自然,最为常用.如下面三句话所示,其意义相同. I like the way in which he talks. I like the way that he talks. I like the way he talks. 一.在当代美国英语中,the way用作为副词的对格,"the way+从句"实际上相当于一个状语从句来修饰全句. the way=as 1)I'm talking to you just the way I'd talk to a boy of my own. 我和你说话就象和自己孩子说话一样. 2)He did not do it the way his friend did. 他没有象他朋友那样去做此事. 3)Most fruits are naturally sweet and we can eat them just the way they are ----all we have to do is clean or peel them . 大部分水果天然甜润,可以直接食用,我们只需要把他们清洗一下或去皮.
way的用法总结大全 way的用法你知道多少，今天给大家带来way的用法，希望能够帮助到大家，下面就和大家分享，来欣赏一下吧。 way的用法总结大全 way的意思 n. 道路,方法,方向,某方面 adv. 远远地，大大地 way用法 way可以用作名词 way的基本意思是“路,道,街,径”,一般用来指具体的“路,道路”,也可指通向某地的“方向”“路线”或做某事所采用的手段,即“方式,方法”。way还可指“习俗,作风”“距离”“附近,周围”“某方面”等。 way作“方法,方式,手段”解时,前面常加介词in。如果way前有this, that等限定词,介词可省略,但如果放在句首,介词则不可省略。
way作“方式,方法”解时,其后可接of v -ing或to- v 作定语,也可接定语从句,引导从句的关系代词或关系副词常可省略。 way用作名词的用法例句 I am on my way to the grocery store.我正在去杂货店的路上。 We lost the way in the dark.我们在黑夜中迷路了。 He asked me the way to London.他问我去伦敦的路。 way可以用作副词 way用作副词时意思是“远远地,大大地”,通常指在程度或距离上有一定的差距。 way back表示“很久以前”。 way用作副词的用法例句 It seems like Im always way too busy with work.我工作总是太忙了。 His ideas were way ahead of his time.他的思想远远超越了他那个时代。 She finished the race way ahead of the other runners.她第一个跑到终点,远远领先于其他选手。 way用法例句
t h e_w a y的用法大全
The way 在the way+从句中, the way 是先行词, 其后是定语从句.它有三种表达形式:1) the way+that 2)the way+ in which 3)the way + 从句(省略了that或in which),在通常情况下, 用in which 引导的定语从句最为正式,用that的次之,而省略了关系代词that 或 in which 的, 反而显得更自然,最为常用.如下面三句话所示,其意义相同. I like the way in which he talks. I like the way that he talks. I like the way he talks. 如果怕弄混淆，下面的可以不看了 另外，在当代美国英语中,the way用作为副词的对格,"the way+从句"实际上相当于一个状语从句来修饰全句. the way=as 1)I'm talking to you just the way I'd talk to a boy of my own. 我和你说话就象和自己孩子说话一样. 2)He did not do it the way his friend did. 他没有象他朋友那样去做此事. 3)Most fruits are naturally sweet and we can eat them just the way they are ----all we have to do is clean or peel them . 大部分水果天然甜润,可以直接食用,我们只需要把他们清洗一下或去皮. the way=according to the way/judging from the way 4)The way you answer the qquestions, you must be an excellent student. 从你回答就知道,你是一个优秀的学生. 5)The way most people look at you, you'd think a trashman was a monster. 从大多数人看你的目光中,你就知道垃圾工在他们眼里是怪物. the way=how/how much 6)I know where you are from by the way you pronounce my name. 从你叫我名字的音调中,我知道你哪里人. 7)No one can imaine the way he misses her. 人们很想想象他是多么想念她. the way=because 8) No wonder that girls looks down upon me, the way you encourage her. 难怪那姑娘看不起我, 原来是你怂恿的
The way 的用法 "the way+从句"结构在英语教科书中出现的频率较高, the way 是先行词, 其后是定语从句.它有三种表达形式:1) the way+that 2)the way+ in which 3)the way + 从句(省略了that或in which),在通常情况下, 用in which 引导的定语从句最为正式,用that的次之,而省略了关系代词that 或in which 的, 反而显得更自然,最为常用.如下面三句话所示,其意义相同. I like the way in which he talks. I like the way that he talks. I like the way he talks. 一.在当代美国英语中,the way用作为副词的对格,"the way+从句"实际上相当于一个状语从句来修饰全句. the way=as 1)I'm talking to you just the way I'd talk to a boy of my own. 我和你说话就象和自己孩子说话一样. 2)He did not do it the way his friend did. 他没有象他朋友那样去做此事. 3)Most fruits are naturally sweet and we can eat them just the way they are ----all we have to do is clean or peel them . 大部分水果天然甜润,可以直接食用,我们只需要把他们清洗一下或去皮.
the way=according to the way/judging from the way 4)The way you answer the qquestions, you must be an excellent student. 从你回答就知道,你是一个优秀的学生. 5)The way most people look at you, you'd think a trashman was a monster. 从大多数人看你的目光中,你就知道垃圾工在他们眼里是怪物. the way=how/how much 6)I know where you are from by the way you pronounce my name. 从你叫我名字的音调中,我知道你哪里人. 7)No one can imaine the way he misses her. 人们很想想象他是多么想念她. the way=because 8) No wonder that girls looks down upon me, the way you encourage her. 难怪那姑娘看不起我, 原来是你怂恿的 the way =while/when(表示对比) 9)From that day on, they walked into the classroom carrying defeat on their shoulders the way other students carried textbooks under their arms. 从那天起,其他同学是夹着书本来上课,而他们却带着"失败"的思想负担来上课.
The way的用法及其含义（三） 三、the way的语义 1. the way=as（像） Please do it the way I’ve told you.请按照我告诉你的那样做。 I'm talking to you just the way I'd talk to a boy of my own.我和你说话就像和自己孩子说话一样。 Plant need water the way they need sun light. 植物需要水就像它们需要阳光一样。 2. the way=how（怎样，多么） No one can imagine the way he misses her.没人能够想象出他是多么想念她！ I want to find out the way a volcano has formed.我想弄清楚火山是怎样形成的。 He was filled with anger at the way he had been treated.他因遭受如此待遇而怒火满腔。That’s the way she speaks.她就是那样讲话的。 3. the way=according as （根据） The way you answer the questions, you must be an excellent student.从你回答问题来看，你一定是名优秀的学生。 The way most people look at you, you'd think a trash man was a monster.从大多数人看你的目光中,你就知道垃圾工在他们眼里是怪物。 The way I look at it, it’s not what you do that matters so much.依我看，重要的并不是你做什么。 I might have been his son the way he talked.根据他说话的样子，好像我是他的儿子一样。One would think these men owned the earth the way they behave.他们这样行动，人家竟会以为他们是地球的主人。
一．Way：“方式”、“方法” 1.表示用某种方法或按某种方式 Do it (in) your own way. Please do not talk (in) that way. 2.表示做某事的方式或方法 It’s the best way of studying [to study] English.。 There are different ways to do [of doing] it. 3.其后通常可直接跟一个定语从句(不用任何引导词)，也可跟由that 或in which 引导的定语从句 正：I don’t like the way he spoke. I don’t like the way that he spoke. I don’t like the way in which he spoke.误：I don’t like the way how he spoke. 4. the way 的从句 That’s the way (=how) he spoke. I know where you are from by the way you pronounce my name. That was the way minority nationalities were treated in old China. Nobody else loves you the way(=as) I do. He did not do it the way his friend did. 二．固定搭配 1. In a/one way：In a way he was right. 2. In the way /get in one’s way I'm afraid your car is in the way， If you are not going to help，at least don't get in the way. You'll have to move－you're in my way. 3. in no way Theory can in no way be separated from practice. 4. On the way (to……) Let’s wait a few moments. He is on the way Spring is on the way. Radio forecasts said a sixth-grade wind was on the way. She has two children with another one on the way. 5. By the way By the way，do you know where Mary lives? 6. By way of Learn English by way of watching US TV series. 8. under way 1. Elbow one’s way He elbowed his way to the front of the queue. 2. shoulder one’s way 3. feel one‘s way 摸索着向前走；We couldn’t see anything in the cave, so we had to feel our way out 4. fight/force one’s way 突破。。。而前进The surrounded soldiers fought their way out. 5.. push/thrust one‘s way（在人群中）挤出一条路He pushed his way through the crowd. 6. wind one’s way 蜿蜒前进 7. lead the way 带路，领路；示范 8. lose one‘s way 迷失方向 9. clear the way 排除障碍，开路迷路 10. make one’s way 前进，行进The team slowly made their way through the jungle.
在the way+从句中, the way 是先行词, 其后是定语从句.它有三种表达形式:1) the way+that 2)the way+ in which 3)the way + 从句(省略了that或in which),在通常情况下, 用in which 引导的定语从句最为正式,用that的次之,而省略了关系代词that 或in which 的, 反而显得更自然,最为常用.如下面三句话所示,其意义相同. I like the way in which he talks. I like the way that he talks. I like the way he talks. 如果怕弄混淆，下面的可以不看了 另外，在当代美国英语中,the way用作为副词的对格,"the way+从句"实际上相当于一个状语从句来修饰全句. the way=as 1)I'm talking to you just the way I'd talk to a boy of my own. 我和你说话就象和自己孩子说话一样. 2)He did not do it the way his friend did. 他没有象他朋友那样去做此事. 3)Most fruits are naturally sweet and we can eat them just the way they are ----all we have to do is clean or peel them . 大部分水果天然甜润,可以直接食用,我们只需要把他们清洗一下或去皮. the way=according to the way/judging from the way 4)The way you answer the qquestions, you must be an excellent student. 从你回答就知道,你是一个优秀的学生. 5)The way most people look at you, you'd think a trashman was a monster. 从大多数人看你的目光中,你就知道垃圾工在他们眼里是怪物. the way=how/how much 6)I know where you are from by the way you pronounce my name. 从你叫我名字的音调中,我知道你哪里人. 7)No one can imaine the way he misses her. 人们很想想象他是多么想念她. the way=because 8) No wonder that girls looks down upon me, the way you encourage her. 难怪那姑娘看不起我, 原来是你怂恿的 the way =while/when(表示对比) 9)From that day on, they walked into the classroom carrying defeat on their shoulders the way other students carried textbooks under their arms.
“the way+从句”结构的意义及用法 首先让我们来看下面这个句子： Read the following passage and talk about it with your classmates. Try to tell what you think of Tom and of the way the children treated him. 在这个句子中，the way是先行词，后面是省略了关系副词that 或in which的定语从句。 下面我们将叙述“the way+从句”结构的用法。 1．the way之后，引导定语从句的关系词是that而不是how,因此，<<现代英语惯用法词典>>中所给出的下面两个句子是错误的：This is the way how it happened. This is the way how he always treats me. 2. 在正式语体中，that可被in which所代替；在非正式语体中，that则往往省略。由此我们得到the way后接定语从句时的三种模式：1) the way +that-从句2) the way +in which-从句3) the way +从句 例如：The way(in which ,that) these comrades look at problems is wrong.这些同志看问题的方法不对。
The way(that ,in which)you’re doing it is completely crazy.你这么个干法，简直发疯。 We admired him for the way in which he faces difficulties. Wallace and Darwin greed on the way in which different forms of life had begun.华莱士和达尔文对不同类型的生物是如何起源的持相同的观点。 This is the way (that) he did it. I liked the way (that) she organized the meeting. 3.the way(that)有时可以与how(作“如何”解)通用。例如： That’s the way (that) she spoke. = That’s how she spoke. I should like to know the way/how you learned to master the fundamental technique within so short a time. 4．the way的其它用法：以上我们讲的都是用作先行词的the way，下面我们将叙述它的一些用法。
定冠词the的12种用法 定冠词the 的12 种用法，全知道?快来一起学习吧。下面就和大家分享，来欣赏一下吧。 定冠词the 的12 种用法，全知道? 定冠词the用在各种名词前面，目的是对这个名词做个记号，表示它的特指属性。所以在词汇表中，定冠词the 的词义是“这个，那个，这些，那些”，可见，the 即可以放在可数名词前，也可以修饰不可数名词，the 后面的名词可以是单数，也可以是复数。 定冠词的基本用法： (1) 表示对某人、某物进行特指，所谓的特指就是“不是别的，就是那个!”如： The girl with a red cap is Susan. 戴了个红帽子的女孩是苏珊。 (2) 一旦用到the，表示谈话的俩人都知道说的谁、说的啥。如：
The dog is sick. 狗狗病了。(双方都知道是哪一只狗) (3) 前面提到过的，后文又提到。如： There is a cat in the tree.Thecat is black. 树上有一只猫，猫是黑色的。 (4) 表示世界上唯一的事物。如： The Great Wall is a wonder.万里长城是个奇迹。(5) 方位名词前。如： thenorth of the Yangtze River 长江以北地区 (6) 在序数词和形容词最高级的前面。如： Who is the first?谁第一个? Sam is the tallest.山姆最高。 但是不能认为，最高级前必须加the，如： My best friend. 我最好的朋友。 (7) 在乐器前。如： play the flute 吹笛子
Way用法 A:I think you should phone Jenny and say sorry to her. B:_______. It was her fault. A. No way B. Not possible C. No chance D. Not at all 说明：正确答案是A. No way，意思是“别想！没门！决不！” 我认为你应该打电话给珍妮并向她道歉。 没门！这是她的错。 再看两个关于no way的例句： （1）Give up our tea break? NO way! 让我们放弃喝茶的休息时间？没门儿！ （2）No way will I go on working for that boss. 我决不再给那个老板干了。 way一词含义丰富，由它构成的短语用法也很灵活。为了便于同学们掌握和用好它，现结合实例将其用法归纳如下： 一、way的含义 1. 路线
He asked me the way to London. 他问我去伦敦的路。 We had to pick our way along the muddy track. 我们不得不在泥泞的小道上择路而行。 2. （沿某）方向 Look this way, please. 请往这边看。 Kindly step this way, ladies and gentlemen. 女士们、先生们，请这边走。 Look both ways before crossing the road. 过马路前向两边看一看。 Make sure that the sign is right way up. 一定要把符号的上下弄对。 3. 道、路、街，常用以构成复合词 a highway（公路），a waterway（水路），a railway（铁路），wayside（路边）
way/time的特殊用法 1、当先行词是way意思为”方式.方法”的时候,引导定语从句的关系词有下列3种形式： Way在从句中做宾语 The way that / which he explained to us is quite simple. Way在从句中做状语 The way t hat /in which he explained the sentence to us is quite simple. 2、当先行词是time时,若time表示次数时,应用关系代词that引导定语从句,that可以省略; 若time表示”一段时间”讲时,应用关系副词when或介词at/during + which引导定语从句 1.Is this factory _______ we visited last year? 2.Is this the factory-------we visited last year? A. where B in which C the one D which 3. This is the last time _________ I shall give you a lesson. A. when B that C which D in which 4.I don’t like the way ________ you laugh at her. A . that B on which C which D as 5.He didn’t understand the wa y ________ I worked out the problem. A which B in which C where D what 6.I could hardly remember how many times----I’ve failed. A that B which C in which D when 7.This is the second time--------the president has visited the country. A which B where C that D in which 8.This was at a time------there were no televisions, no computers or radios. A what B when C which D that