The authors show that, although details may vary, banking crises follow the same broad script. Each blow-up is preceded by rising home and equity prices; an acceleration in capital inflows driven by optimistic foreign investors; a rapid build-up of debt; and--immediately before the storm hits--an inverted V-shaped path for the economy, with growth first picking up and then faltering.The quote refers to the American economy, but it could as well be referring to India.
I have been subscribing to the Economic Times for a month or so, with a view to making some money in the stock market (changed priorities and all that). It's been a pretty mixed experience; not investment-wise -- I am yet to dip a toe into the waters -- but in terms of gaining insight and understanding. Will probably post something on this later.
