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 Originally Posted by wufwugy
About asset prices, it is not a good idea to use them as evidence for or against something. That's one of the fatal flaws in economic logic called "reasoning from a price change." You want to reason from an information change and then interpret the price change through that. Stocks today can be up for all sorts of different reasons. What we want to do is say "what new information has there been and what effect could that have" and then look at stock prices through that lens. What we don't want to say is "stocks are up therefore Trump must be doing something right."
Is there an economic model that predicts, even retrospectively, what the stock market will do?
What I mean is if you plug into this model variables a through z, things like 'a =reducing regulations', or 'b =cutting taxes' , etc., can that model predict with some sort of accuracy how these things affect the stock market?
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