He says that the financial system is properly thought of as a subsystem of the economic system. The financial system anticipates the changes probably coming soon to the economic system. Important changes that happen in the economy are reflected in stock prices, interest rates and in business balance sheets and income statements. As people make projections about change in the economy, they make changes in their financial arrangements. That is the big question.
Speculation is when money goes into existing assets instead of new assets.
Dr. Christy will tell any student that the ability to predict a recession is an art form. It helps to know the financial signs which tell you which stage you are in. Don't believe the ads and the claims about financial smarts. It is more important to get the general idea than to call every turn to precision. It was when someone shining his boots gave him a stock tip.