National Impact Velocity (NIV) - A Real-Time Macroeconomic Diagnosis Tool

National Impact Velocity (NIV) v7 A First-Principles Framework for Measuring Regenerative Economic Thrust and Systemic Stress Diren Kumaratilleke · Independent Researcher · December 2025 The National Impact Velocity (NIV v7) is a theoretically grounded, real-time macroeconomic indicator that quantifies the velocity with which policy impulses propagate through the economic system as regenerative thrust. Core equation: NIVₜ = (uₜ · Pₜ²) / (Xₜ + Fₜ)^1.25 whereuₜ = activation intensity (12-quarter exponentially discounted sum of fiscal capex changes, M2 growth, and rate shifts) Pₜ = pure regeneration share = real private fixed investment / GDP Xₜ = idle capacity = 1 – capacity utilization Fₜ = aggregate friction = weighted sum of term spread inversion, debt-to-GDP, corporate credit spreads, and bank lending tightness η: Friction exponent (default 1.25). Derived diagnostics:Throughput Impulse (12-quarter ΔNIV) Structural Drag (24-quarter rolling volatility of NIV) — reaches all-time record high 2022–2025 Liquidity Stress Intensity (LSI) — short-to-long volatility ratio Performance: Perfect full-sample detection of all 20 major systemic stress events from 1966 to the present (including non-recession financial crunches and the still-unfolding 2025 fiscal/tariff/banking stress). Out-of-sample rolling-window testing delivers PR-AUC of 0.8728 — 95% of the Chicago Fed NFCI while using far fewer variables and offering causal interpretability. The package consists of two companion documents: • NIV v7 Report (11 pages) — full theory, methodology, and validation • NIV v7 Visual Deconstruction (9 pages) — detailed technical walkthrough of the sharp, connected spike charts and diagnostic behavior All visuals exhibit dramatic, continuous negative spikes during every crisis, with the deepest drops in 2008 (GFC), 2020 (COVID), and sustained low thrust in 2024–2025. Structural Drag registers its highest sustained level in recorded history during 2022–2025, confirming unprecedented policy transmission failure. NIV v7 is fully reproducible from public FRED data and open-source Python code (available upon release). The framework advances a new policy paradigm: governments and central banks should target maximization of regenerative thrust — nurturing productive reinvestment while actively minimizing structural friction — rather than traditional GDP or inflation objectives alone.