Technical Documentation

NIV Methodology

Complete mathematical breakdown of the National Impact Velocity formula with real-time FRED data.

NIV_t = (u_t · P_t²) / (X_t + F_t)^η

National Impact Velocity — measures economic momentum vs. friction

Component Definitions

Thrust (u)— Kinetic Impulse

u = tanh(+1.0·ΔG + 1.0·ΔA − 0.7·Δr)

+ΔG = Investment YoY growth

(positive = expansion)

+ΔA = M2 money YoY growth

(positive = liquidity)

−Δr = Fed Funds rate Δ

(hikes subtract thrust)

Range: [−1, +1] via tanh. Positive = expansion impulse, Negative = contraction impulse.

Efficiency (P)— Capital Productivity

P = (Investment × 1.15) / GDP

Investment = GPDIC1

Real Private Domestic Investment

1.15 = R&D/Education proxy multiplier

Squared in formula (P²) to reward productive capital allocation and punish hollow growth.

Slack (X)— Economic Headroom

X = 1 − (TCU / 100)

TCU = Total Capacity Utilization (typically 70-85%)

Range: [0, 1]. High slack = room to grow. Low slack = economy near capacity limits.

Drag (F)— Friction Forces

F = 0.4·s + 0.4·max(0, r−π) + 0.2·σ

s = Yield inversion penalty

|T10Y3M|/100 if inverted

r−π = Real interest rate

FedFunds/100 − Inflation

σ = Rate volatility

12-mo rolling StdDev/100

All components add friction that slows capital circulation. Higher F = more economic drag.

Nonlinearity (η = 1.5)— Crisis Sensitivity

The exponent η = 1.5 captures the nonlinear impact of friction on capital flow. Small increases in drag have disproportionately large effects when the economy is already stressed.