Based on our empirical results, using the Extreme Value theory, we conclude that stock market performance, particularly in times of vulnerabilities, does contain some information which may signal an impending crisis. This signal can be within the same month up to between 1- 3 months ahead. We are, however, not arguing that policymakers must take into account asset prices in their policy decisions. On the contrary, we argue that policymakers may want to be proactive and react accordingly to lessen the likelihood and impact of potential crisis in the making.
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