Recently there has been growing interest in examining the potential short-term link between survey-based confidence indicators and real economic activity, notably for macroeconomic policy making. This paper builds on previous studies to establish whether there is a short-term predictive...

Given the magnitude of “global imbalances” in the run-up to the subprime crisis, we test for an impact of the current account balance on the probability of banking crises in OECD countries since 1980. This variable has been neglected in most early warning models to date, despite its...

Simple time series models looking for the effect of financial crises on output generally find that they reduce the sustainable level of output permanently. However, not all crises are the same, with some being caused by recessions and others causing or preceding recessions. Using a common...

In the wake of the subprime crisis, there has been widespread discussion of the disproportionate risks posed to the financial system by large banks that may consider themselves “too big to fail”. This has led in turn to suggestions that radical policies with the effect of reducing bank size...

Simple time series models looking for the effect of financial crises on output generally find that they reduce the sustainable level of output permanently. However, not all crises are the same, with some being caused by recessions and others causing or preceding recessions. Using a common...

Policy proposals on the new international standards for bank capital and liquidity are being debated without any methodical evaluation of their effects on both crisis probabilities and concurrent social costs.

In this paper we construct a framework for evaluating the macroeconomic impact on the UK economy of policies that are aimed at reducing the number of people receiving social security benefits and getting them into employment. By means of model simulations we find that a 5 per cent reduction in...

After a long period of robust growth and low inflation, the economic outlook has darkened. Growth is slowing and inflation is rising. GDP is forecast to grow by 1.5 per cent in 2008 and 1.4 per cent in 2009. Much of the growth will come from net trade, which will contribute 0.5 per cent to...