Can We Predict the Next Market Crash?
Although the Global Financial Crisis (GFC) of 2008 is almost a decade behind us, its ghost continues to haunt the investment landscape, particularly as risk markets reach new highs. For those searching for signs of the next crisis, the bricks in their wall of worry include, amongst others, high debt levels, tighter central bank policies, a hard landing in China, and heightened geopolitical uncertainty.
But can the next crash be predicted? In this paper, Arvind Rajan, Managing Director and Head of Global and Macro, PGIM Fixed Income, examines the research on market crash predictors and macroeconomic early warning systems.