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Financial shocks and the real economy in a nonlinear world : from theory to estimation

Silvestrini, Andrea; Zaghini, Andrea - 2015

We examine the inter-linkages between financial factors and real economic activity. We review the main theoretical approaches that allow financial frictions to be embedded into general equilibrium models. We outline, from a policy perspective, the most recent empirical papers focusing on the...

Persistent link: https://www.econbiz.de/10011279726

Contagion Along the Business Cycle

Ferrari, Massimo - 2018

In this paper, I incorporate a complex network model into a state of the art stochastic general equilibrium framework with an active interbank market. On this market banks exchange funds one another giving rise to a complex network of interbanking relations. With the tools of network analysis it...

Persistent link: https://www.econbiz.de/10012918285

Procyclical finance : the money view

Li, Ye - 2017

Financial intermediaries issue the majority of liquid securities, and nonfinancial firms have become net savers, holding intermediaries' debt as cash. This paper shows that intermediaries' liquidity creation stimulates growth -- firms hold their debt for unhedgeable investment needs -- but also...

Persistent link: https://www.econbiz.de/10011968932

Coherent financial cycles for G-7 countries : why extending credit can be an asset

Schüler, Yves S.; Hiebert, Paul P.; Peltonen, Tuomo - 2017

Failing to account for joint dynamics of credit and asset prices can be hazardous for countercyclical macroprudential policy. We show that composite financial cycles, emphasising expansions and contractions common to credit and asset prices, powerfully predict systemic banking crises. Further,...

Persistent link: https://www.econbiz.de/10011976914

Schüler, Yves S. - 2018

I show that the detrending of financial variables with the Hodrick and Prescott (1981, 1997) (HP) and band-pass filters leads to spurious cycles. I find that distortions become especially severe when considering medium-term cycles, i.e., cycles that exceed the duration of regular business...

Persistent link: https://www.econbiz.de/10011813473

The Cause of the Great Recession : In Pursuit of an Alternative Explanation

Larson, Sven R. - 2015

The prevailing narrative about the Great Recession is that it was caused by a financial crisis. This paper refutes that explanation and offers an alternative, namely that issuance of bad government debt played a key role in escalating a regular recession to an economic crisis

Persistent link: https://www.econbiz.de/10013013714

The General Theory as "depression economics"? : financial instability and crises in Keynes's monetary thought

Bibow, Jörg - 2020

This paper revisits Keynes's writings from Indian Currency and Finance (1913) to The General Theory (1936) with a focus on financial instability. The analysis reveals Keynes's astute concerns about the stability/fragility of the banking system, especially under deflationary conditions. Keynes's...

Persistent link: https://www.econbiz.de/10012291986

The effect of a financial block on the identification of confidence shocks in a structural VAR model

Myohl, Christian - 2018

This paper studies the propagation and properties of a confidence shock in a structural vector autoregression (VAR … and the contribution to the forecast error variance by the confidence shock. Nevertheless, for specific historical … smaller role to confidence shocks for the fall in GDP. This suggests that the confidence shock may not be properly identified …

Persistent link: https://www.econbiz.de/10011961326

Confidence and the financial accelerator

Myohl, Christian; Stucki, Yannic - 2018

use the heterogeneous-prior framework of Angeletos, Collard, and Dellas (2018) to accommodate confidence-driven business … cycle fluctuations. We show that financial frictions strongly amplify the response to confidence shocks - more strongly than …

Persistent link: https://www.econbiz.de/10011961330

Reassessing the thesis of the monetary history

Laidler, David E. W. - 2013

The economic crisis that began in 2007 and still lingers has invited comparison with the Great Depression of the 1930s. It has also generated renewed interest in Milton Friedman and Anna Schwartz's explanation of the latter as mainly the consequence of the Fed's failure as a lender of last...

Persistent link: https://www.econbiz.de/10010191681