Greg Mankiw posts this interesting debate between Robert Shiller (Irrational Exuberance) and Jeremy Siegel (Stocks For The Long Run) on whether the stock market is overvalued.

I'm basically in the Shiller camp. Corporate profits have been unusually high for the last few years, as weak firms went out of business and firms shed their workforce.  The S&P 500's price-to-earnings ratio is in the high end of its historical range.  It's still within its historical range, to be sure, but after a punishing recession, and with further storm clouds on the horizon, that seems to me to point to a least some level of overvaluation.  That doesn't necessarily mean it will fall.  Rather, it means that it is more likely to deliver lower returns in the future.