The Bubble Index adds the average annual growth rate of six economic indicators over the prior three years and compares them to the 3-year period just prior to the 2008 financial crises to gage whether the current economy is headed toward an unsustainable bubble as occurred in 2008. The six indicators are the average 12 month % change in (1) the stock market; (2) real estate housing price index (or property prices or Housing Starts if a price index is not available); (3) personal consumption; (4) employment; (5), real GDP growth; and (6) total debt as a % of GDP.
