The significantly positive coefficient for the lagged inflation indicates that the current year's bank lending rate incorporates previous year's inflation as an expected inflation premium
for the current year.
To the extent that small firms operate in more competitive environments, they may have less pricing power than larger firms, and hence may be more exposed to inflation risk, and hence command an inflation premium
relative to larger firms.
These returns are combination of real return, inflation premium
, risk premium, default risk premium and maturity risk premium.
Subsequently, we used the method of extracting the Durham premium (2007) to estimate the inflation premium
and extract an implicit measure of inflation (BEIR) that is less distorted.
Nevertheless, the scope for steepening seems limited given the MENA tensions and the associated short-term risk and inflation premium
In exchange for extending more loans to a federal government that has become a riskier borrower, lenders will ask for an inflation premium
What has mostly flowed is the supply of dollars, and so some part of oil's increase should be called the Alan Greenspan-Ben Bernanke inflation premium
Variants of the low inflation premium
story appear in:
The Fed has spent most of the last 25 years eliminating the expected inflation premium
from interest rates.
plus the inflation premium
for an investment horizon of m periods
The average inflation premium
is negative, as one would expect given the negative impact of inflation on the mean of asset returns.
Theoretically, Modigliani and Cohn  have shown that expected stock returns should equal the current earnings yield on stocks (defined as earnings over price (E/P)) plus an inflation premium