Ah, that makes sense. So it is any decline in equity assets through which the rate of selling is faster than the decline in the underlying assets (presumably...

Ah, that makes sense. So it is any decline in equity assets through which the rate of selling is faster than the decline in the underlying assets (presumably...if the rate of selling was slower then the ratio would be less than 50%?). I still have the same problem. The reason cycles cycle is because of the movement in money demand...which tend to be correlated to everything else. Being able to predict who will panic-sell could be correlated to other things (always a problem in financial economics). I will need the read paper properly but would be interested to see how they deal with cash coming into and out of the account.