Harvard professor and former IMF Chief Economist Gita Gopinath, on Thursday, stated that the global exposure to equities in the US is at an all-time high and that, in comparison to what occurred after the dot-com crash, a stock market correction would carry far worse and more international ramifications.
Gita Gopinath: There is a need for higher growth
On X, she wrote, “The world exposure of the US equities is at an all-time high. Any event of a stock market correction would have more global and drastic effects compared to those that occurred after the dot-com crash.”
She continued, “The tariff wars and fiscal space exacerbate the problem. It is not about unbalanced trade but it is about unbalanced growth.”
Gopinath in an article published in the magazine The Economist stated that more countries/regions of the world require higher growth and returns, rather than the US alone.
The exposure of the world to US equities is at record levels. A stock market correction would have more severe and global consequences as compared to what followed the dot-com crash. The tariff wars and lack of fiscal space compounds the problem. The underlying problem is not… pic.twitter.com/LFaN4mNgqn
— Gita Gopinath (@GitaGopinath) October 15, 2025
The IMF had its first deputy managing director in Gopinath, followed by chief economist between 2019 and 2022, and between 2022 and 2025. She is currently a Professor of Economics at Harvard University, Gregory and Ania Coffey.
IMF Warns of Looming Global Market Instability
US shares are selling at a 46 per cent upscale to the global ones with 22x forward earnings. According to the models of IMF, this cannot be justified at all.
Researchers have expressed worries regarding increased threats to global financial stability as indicated by the IMF, in its bi-annual Global Financial Stability Report, October 2025.
The report states that some risk asset valuations have again been pushed after a short-lived correction, the US dollar has been depreciated by 10 per cent to date, and debt is progressing toward the government sector- some of the major issues which IMF has raised.
IMF further added that investors have become too complacent concerning the increasing risks, even though the prices of assets are trading significantly over their fundamentals.
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What Is The Dot-Com Bubble Crash?
With the beginning of the World Wide Web or popularly internet, in late 1990s and early 2000s, the value of some company stocks has soared to stratospheric levels even though they had no or minimal profits.
These internet stocks were being poured with the freakish rate by the investors hoping to see growth. However, the bubble was burst in 2000 and the market as well as trillions of dollars worth of markets had been wiped out.
