Social Mood Conference  |  Socionomics Foundation

By Alan Hall | Excerpted from the January 2018 Socionomist


 

The commonly held view is that negative events cause the future to be less certain. Socionomists believe that negative mood not only drives negative events but also impels people to view their future as uncertain. The August 2012 issue of The Socionomist explained that uncertainty indexes developed by researchers reflect traits of the social mood trend that simultaneously appear in the stock market. Eventually, that trend also shows up in the economy. The January 2018 issue takes a follow-up look at uncertainty, which continues to be a topic of interest to academics. Following are some excerpts from that issue:

The August 2012 issue presented evidence that social mood impels feelings of certainty and uncertainty. The research is included in Chapter 26 of The Socionomic Theory of Finance (STF). Since 2012, we have uncovered more evidence of this relationship, which myself and my colleague Alex Bentley of the University of Tennessee at Knoxville detailed in a paper we’ve submitted for peer review. …

We found that changes in the MSCI World Stock Index (MSCI) can be used to predict changes in the Global Economic Policy Uncertainty Index (GEPU), but that changes in the GEPU cannot be used to predict the MSCI. …

Our tests show that the strongest correlation is between GEPU and the average of the previous twelve monthly changes in the MSCI. Charts of monthly and daily data also show that downturns in stock prices tend to precede both increases in uncertainty and negative events. This chronology contradicts the conventional view that negative events cause feelings of uncertainty and downturns in stock prices. …

In this article, we assess the socionomic versus conventional views of uncertainty and then examine graphical evidence of the timing of daily fluctuations in the Dow Jones Industrial Average, one of our benchmark sociometers, and in an index of U.S. economic policy uncertainty. …


 

Want more content like this?

The Socionomist is the only monthly publication that offers you practical insights on the relationship between social mood, financial markets and cultural trends. Each issue warns you about big societal changes before they can harm you and reveals breakthrough opportunities emerging from trends in society. Become a socionomics member today and get instant access to The Socionomist.

Learn more about The Socionomics Membership now.

(Socionomics Members: Log in for the full article and your complete, exclusive archive.)

Tags