Can leading indicators assess country vulnerability? Evidence from the 2008-09 global financial crisis

► Warning indicators from previous crises also predicted vulnerability in 2008-09. ► Strongest predictor, by 6 definitions of crisis severity: International reserves. ► Real exchange rate measures are the second strongest indicator of vulnerability. ► Others: credit growth, current account, saving rate, external and short-term debt. ► The global financial shock is defined as running from late 2008 to early 2009.