Having almost doubled between 2000 and 2007, to 185% of GDP (the ‘financial market peak’), the stock of foreign investment liabilities as a share of GDP fell only slightly after the global financial crisis, to $ trillion or 183% of world GDP (see Figure 7 below).
Sooner or later, something extraordinary happens to the economy that a model cannot explain, pushing it persistently off track. A forecaster can rationalize a string of prediction errors for a while and adjust his or her judgment around the outlook accordingly, but eventually the time comes to rebuild the model.