We study how the output gap affects potential output over time-i.e., the dynamic hysteresis effect. To do so, we introduce novel unobserved components (UC) models that consider hysteresis as a sequence of lagged effects, thus separating the long-run recession-induced adverse effects from other...

The existing econometric evidence on the relationship between stock indices and real economic activity is inconclusive despite theoretical arguments suggesting a long-term relationship. Previous studies indicate that the link between stock prices and growth became weaker in the 1980s. In this...

This study uses panel data from 31 Chinese provinces covering the years 2011–2020 to investigate the long-term equilibrium between digital finance and the real economy. A number of statistical model, such as the cross-sectional dependence test, the CADF unit root test, the panel cointegration...