If x and y are correlated, it could be the case that x causes y, y causes x, or x and y are both caused by z. Could it be the case that high levels of debt and

If x and y are correlated, it could be the case that x causes y, y causes x, or x and y are both caused by z. Could it be the case that high levels of debt and crashes are both caused by the business cycle? If debt increases when the economy grows (because debt is used to fund investment), and the economy grows and recedes in a cycle, won’t we expect there to always be lots of debt before the recession? In the counterfactual where we don’t have debt, we’d also have less investment, so perhaps development would be permanently lower (ie. worse than the low point of each recession). This is similar to the observations that the stock market is always highest before a recession, or the tallest skyscrapers are built before a recession.