Saturday, November 06, 2010

The Economics of Fiscal Deficits

I attended this presentation, by Marlena Lee, at Dimensional's office in Sydney in October. She uses historical data to make some really good points that are often missed by mainstream financial media, with there short-term focus and constant search for a narrative to explain recent events and market movements:
Many investors are concerned that rising government debt will stunt economic growth and hamper market returns. Marlena Lee examines historical data to test the relationships between fiscal deficits, interest rates, business activity, investment returns, and exchange rates. Her conclusions may surprise investors who are pessimistic about future market performance.
VIEW MARLENA'S PRESENTATION HERE (approx. 15 minutes.)