SIGNS of weakness in advanced economies seem to have taken some
by surprise. In America, GDP growth slipped in the second
quarter of 2012 to a revised figure of 1.7% after growing at a
rate of 2% in the first. In Britain, the economy is contracting
at 0.5% a year based on latest data, adding to an increasing
sense of frustration felt towards the government for failing to
ensure a faster recovery.  But perhaps we are suffering from
memory lapse. To understand the effects of an economic crisis,
you have to go back to its roots. A new study by Alan Taylor
draws attention back to the causes of the 2008 financial crisis.
Through a series of tests run on a sample of 14 advanced
economies between 1870 and 2008, Mr Taylor establishes a link
between the growth of private sector credit and the likelihood
of financial crisis. The link between crisis and credit is
stronger than between crises and growth in the broad money
supply, the current account deficit, or an increase in public
debt.  Over the 138-year timeframe Mr