Can Crises be Predicted?

Authors Spange, Morten
Subject Danish Economy; Financial markets and financial stability; Danish Economy; Financial stability; Financial markets
Type Monetary Review  
Year 2010
Published 27 July 2010
In 2008, the global economy was hit by a crisis that caught almost all economistsin Denmark and abroad by surprise. Against this backdrop, it is discussed why itwas not possible to predict this sharp reversal of the economy, which was theresult of certain underlying imbalances. Looking ahead, a key issue is how toimprove the ability to identify economic imbalances with negative consequencesfor growth and employment. In this connection, the Bank for InternationalSettlements, BIS, and the International Monetary Fund, IMF, have constructedindicators of economic imbalances.