Research study ties risk aversion to forecasting booms, busts and in-between

What’s going to happen with the economy? This is a common question among investment professionals and anyone handling their own investment management, running a business or working for one. Traditionally, we tend to focus on what everyone else was looking at: figures released by government agencies or private research groups, which surveyed or otherwise accounted for measures of production and other items. Now, a new study by a group of European researchers shows evidence that the future pace of the U.S. economy can be forecast by looking at a less-obvious place: the options market.