Income Inequality Identified as Key Predictor of Financial Crises Over 100 Years
The article explores whether income inequality could be a key factor in causing financial crises, alongside credit booms. By analyzing data from 14 developed countries over a century, the researchers found that income inequality can predict financial crises, even more so than loan growth and other financial factors. The study shows that income inequality consistently has predictive power in forecasting financial crises across different time periods.