Financial Econometrics and Empirical Market Microstructure

Scenario Generation Based on 22-Year Cycle

Based on the 22 (more exactly, 21.8)-year cycle of geomagnetic activity, one can develop a scenario of the periods of increasing and decreasing risks, e. g., for risks of industrial accidents (Fig. 4).

Under this scenario, we can expect risks to rise sharply in 2013, then decreasing over the subsequent period until 2017-2018, from which point the risks are expected to grow until the mid-2020s, then decrease until 2030, and then rise again. This means that if the scenario proves true, those businesses that will survive the crises of 2013 should plan pm earning capital in the tranquil market over the next 5 years and prepare for future risks in the early twenties.