Category: Economics
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A Goals-Based View of Security Prices and Market Dynamics: WHAT IF THERE IS NO “CORRECT” MARKET PRICE?
I have been thinking lately about how a market of goals-based investors might interact. As it turns out, the resulting dynamics are rather interesting and not as simple as one might expect. Goals-based utility theory postulates that investors (of all types) interact with capital markets with specific objectives in mind (see Parker 2020). Investors seek…
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Recession Forecasting with a Neural Net in R
I spend quite a bit of time at work trying to understand where we are in the business cycle. That analysis informs our capital market expectations, and, by extension, our asset allocation and portfolio risk controls. For years now I have used a trusty old linear regression model, held together with bailing wire, duct tape,…
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Labor Force Growth by Decade – R Code
I just posted an interesting look at the growth of the labor force by decade. Given that I used R to produce it, I thought it interesting to share the R code and method. Just for reference, here is the chart: First, we will need the following libraries The quantmod library is a significant reason…
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Current Unconventional Monetary Policy & What Comes Next
I have struggled to answer some basic contradictions in our economy. On the one hand, we have printed, spent, and borrowed unprecedented amounts of money at unprecedented rates. Yet, inflation has been nowhere to be found. The traditional relationship between employment and inflation has been broken (known as the Phillips curve). These are important questions…
Franklin J. Parker, CFA 