In an era of increasing economic volatility, accurate risk measurement has become the cornerstone of financial resilience. Economic Scenario Generators (ESGs) – sophisticated models that simulate potential future economic conditions – stand at the core of risk management in financial organizations. Scenarios generated with an ESG allow financial professionals to assess the risk under various […]
Author: scenariosbyai
Crude Chronicles: The Fascinating History of Oil Price Movements
Few commodities have shaped the modern world quite like oil. The ebbs and flows of this black gold have influenced geopolitics, sparked economic booms and recessions, and transformed entire countries. We explore the dramatic history of oil price movements starting from the late 1970s, discuss price crashes of the 1980s and 2014, consider the impact […]
A Few Economic Scenario Examples Generated by AI, 2025
We present a few specific economic scenarios and discuss the behavior of macroeconomic variables we observed. The scenario examples discussed here are not cherry-picked but rather randomly selected from thousands of scenarios generated by our proprietary AI model.In all illustrated economic scenarios, 2024 Q4 is the last actual period, and 2025 Q1 is the first […]
Stylized Facts in Economic Scenarios
Economic scenarios can be highly complex due to factors such as monetary policy, geopolitical situations, bilateral trade agreements, and the state of the labor market. This complicated reality of economics often requires a simplified interpretation to understand the underlying patterns and dynamics within scenarios. Stylized facts serve as guiding stars in navigating vast amounts of […]
A Few Economic Scenario Examples Generated by AI, 2024
One important aspect of economic scenario generators (ESG) is their ability to capture stylized facts observed in the historical data. Examples of stylized facts include but are not limited to, correlations between macroeconomic indicators, leading and lagging effects, level-dependent dynamic relationships, and even inverse relationships during stress periods. In this blog, we present a few […]
Correlation Between Macroeconomic Indicators
Economic indicators play a vital role in measuring the health of an economy. Some important macroeconomic indicators are the unemployment rate, consumer price index (or CPI which measures inflation), gross domestic product or GDP, disposable income, short-term and long-term interest rates (such as Fed Funds rate and Treasury rates), house price index, and stock market […]