The cause of the next crisis lies elsewhere

Most discussion of the next crisis envisage s a repeat of the last crisis: debt crisis, banking crisis, tumbling asset prices. But this scenario is unlikely, given the new banking regulations, private sector deleveraging, the decline in securitisation and the low inflation and interest rates. The causes of the next crisis must therefore be sought elsewhere: a US external debt crisis if the dollar’s international role diminishes; a collapse in Chinese growth; a crisis caused by productive inefficiency due to the resurgence of companies with dominant positions and the proliferation of zombie firms; a crisis linked to the volatility of capital flows to emerging countries.