There is a new leading indicator that uses intra-family flows into high yield — or junk — bond mutual funds to foresee credit-market overheating, which typically precedes economic downturns. Research by Wharton finance professor Itay Goldstein, and co-authors Azi Ben-Rephael and Jaewon Choi, uses their model to also predict the business cycle by forecasting  GDP growth and unemployment — up to one year earlier than other indicators. “It’s the first study that links the credit markets to flows in mutual funds,” Goldstein noted.  The paper is titled, “ Mutual Fund Flows and Fluctuations in Credit and Business Cycles. ” He discussed the highlights of the study with Knowledge at Wharton. (Listen to the full podcast above).  An edited transcript of the conversation follows. Knowledge at Wharton:  There are a lot of studies out there, as you note in your paper, linking the business cycle to credit markets.…