Financial Systems and Economic Crises

This book examines the main causes of financial instability and highlights that,

with the exception of wars and pandemics, the financial system is the source of the

crisis, not just a means of spreading it, as most mainstream experts believe. Based on

the following findings, the innovative sections of this book provide academics and

policymakers with important and practical knowledge: because negative shifts in the

financial system precede recessions, financial indicators can predict the onset of a

crisis much earlier than real variables; the proposed recession forecasting model can

predict the emergence of the crisis a month in advance. When the economy’s sensitivity

to the financial system is reduced, there will be only modest negative economic

growth and no true recessions.