About Economic Scenarios
 

A Different Type of Newsletter

Nobody can foretell the future. If people knew forthcoming major events they wouldn't tell you about it - they would be too busy making money on their own account. But future outcomes from events greatly affects the value of assets. And valuations can move in unpredicted ways depending on three things: the nature of the events; whether they were anticipated and to what degree; and, what was already priced in markets.

This newsletter concentrates on the first of these factors - the economics of events or scenarios. In so doing, it also sheds light on the second two issues. While we can't foretell the future at least we can point out various scenarios and trace their implications for world financial and goods markets. Finding scenarios is easy enough - the hard bit is to trace through the policy response and global ramifications in a theoretically consistent way.

Major global changes create repercussions that are felt around the world. All economies and markets are linked - all too often in surprising ways. There are so many ramifications from major events, some reinforcing, some conflicting, that it is not possible to determine a priori what outcomes might occur without resort to an integrated theoretically consistent framework. That is what we do.

The model used here is unique in the world but don't take our word for that. It is not a black-box, it is theoretically sound, consistent with mainstream economics and is fully documented for anyone to interrogate. More about the model


How to Use These Scenarios

These scenarios are just that: scenarios. They are not forecasts. We do not know for sure whether the events portrayed here will happen. Also, if the scenario is widely appreciated now, action may already be underway that will change outcomes.

We have our ideas on the probability of these scenarios occurring. But you need to form your own judgement of the probability of these events, or some variation occurring. Next, decide what may be priced in markets already then adjust your portfolio. The value of these scenarios is the insights you gain so you can decide whether assets are overprices or underpriced. For your own tailor-made scenario contact us on www.economicscenarios.com.


Who Will Find This Product Useful?

Anyone whose role it is to make strategic decisions affecting their company’s financial performance will find this newsletter useful. It will appeal to people who appreciate the complexities of international economics and the importance of tracking literally hundreds of linkages and interactions in a global economywide framework.

One of the frequent mistakes strategic analysts can make is to ignore the ‘adding-up’ condition — that someone’s borrowing is someone’s lending, that someone’s extra exports are some other country’s extra imports and that expectations about the future affect today’s decisions. People with a background in international trade and finance or those familiar with general equilibrium theory will more readily appreciate the findings here. The model used here is leading edge — it is internally theoretically consistent and reflects contemporary mainstream economic theory. The authors have internationally recognised professional reputations.
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