The paper investigates the life-cycle of the 2008-2009 financial crisis by linking the Macroeconomic Imbalance Procedure (MIP) Scoreboard of the European Commission to the crisis database of the European Systemic Risk Board (ESRB). The novelty of the analysis is that early warning capacity of...

We examine the consequences of a sudden increase in household debt burdens by exploiting variation in exposure to household foreign currency debt during Hungary's late-2008 currency crisis. The revaluation of debt burdens leads to higher default rates and a collapse in spending. These responses...

This paper addresses if and how excess debt can be considered as an early warning signal for banks and takes an additional dimension by comparing the excess leverage between Islamic and conventional banks in Indonesia before, during, and after the Global Financial Crisis (GFC). To do so, this...

Based on experience with national unemployment, analysts have viewed sharply higher state joblessness as signaling possible further deterioration. However, analyses indicate increasing state-level unemployment by itself does not indicate a recession, and that applying rule-of-thumb properties...

This paper introduces financial cycle indexes and uses them in an early warning exercise. The indexes are based on the traditional theory of business cycles. Juglar cycles are deduced from a number of financial indicators, categorized as leading and lagging indicators, and aggregated into...

Can the upturns and downturns in financial variables serve as early warning indicators of banking crises? Using data from 59 advanced and emerging economies, we show that financial overheating can be detected in real time. Equity prices and output gap are the best leading indicators in advanced...