As a central question for academics, policy analysis, and financial practice, the causality between Main Street and Wall Street is controversial and still fiercely debated. Recent research identifies strong predictive ability of asset markets on future macroeconomic performance.
Címke: forecast
Can Demography Help Us Forecast Stock Returns?
As people are more likely to borrow when they are young but save when they are middle-aged, a high middle to young ratio implies an excess demand for saving, surging the stock prices. So if we can forecast demographic changes, we can forecast stock returns, too.