This is so, so, so similar to equity risk premium / default spreads, and even the interest rates themselves. There's no particular reason why the equity risk pr

This is so, so, so similar to equity risk premium / default spreads, and even the interest rates themselves. There's no particular reason why the equity risk premium should be at 4% or 6% or 8%. But we do know that if it dips too low bad shit happens. Taleb wrote quite a bit on this topic, most clearly about the specific case of realized-vs-impled volatility gap, aka the VIX is too expensive and at the same time you can't short it to make money, you'll lose money, and yes did I say it's too expensive at the same time. And yeah, the mentioned finance "risk factors" also generally keep going down over the decades/centuries. In a similar fashion: the markets dare to use a slightly lower number, over time nothing too bad happens, more people jump the bandwagon. The "cost" of using higher than needed "financial risk factor" is easily in the trillions per year.