Figure 3.5. The Probability of an Asset Price Bust (Percent of times a bust occurs 1–3 years after an alarm is raised relative to the unconditional probability of a bust) For house price busts since 1985, large deviations in credit, current account, and residential investment to GDP are particularly predictive of the likelihood of an impending bust. In the case of stock price busts, these variables are also more predictive than the unconditional probability, though the difference is smaller. 1985–2008 House Price Busts Credit/GDP Current account/GDP Residential investment/GDP House price growth Stock price growth Growth Inflation Credit, current account, and residential investment -10 0 10 20 30 40 50 0 10 20 30 40 50 Stock Price Busts Credit/GDP Current account/GDP Residential investment/GDP House price growth Stock price growth Growth Inflation Credit, current account, and residential investment -10 Source: IMF staff calculations.