POPA Recontested whether excess liquidity measured by real M2 growth minus industrial production growth and there seems to be some merit to it. At…
tested whether excess liquidity measured by real M2 growth minus industrial production growth and there seems to be some merit to it. At the same time, if it is a goldilocks period of growth where volatility is very low, private sector liquidity and credit is ramping up, asset prices will rise by itself. Examples - 1990s, 2010s. At the same time, excess liquidity growth when tested whats the optimal lag based on its correlation with US stock market takes around 6-9 months for it to work its way. But still the correlation isnt the strongest at 0.20. At the same time, it seems like weak mark…
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