Shiller, a Yale professor, calls this a cyclically adjusted P/E (CAPE) ratio because it smooths out the peaks and valleys in earnings during the economic cycle. Even with this year's surging corporate profits, the Standard & Poor's 500-stock index is trading at historically sky-high price-to-earnings ratios. When inflation, as measured by the core consumer price index, has been 2.3% since 1957, the market's P/E based on trailing GAAP earnings has averaged 24.