Financial Stress, Uncertainty, and Economic Activity
Title | Financial Stress, Uncertainty, and Economic Activity PDF eBook |
Author | Björn van Roye |
Publisher | |
Pages | 0 |
Release | 2013 |
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ISBN |
Financial Stress and Economic Activity: Evidence from a New Worldwide Index
Title | Financial Stress and Economic Activity: Evidence from a New Worldwide Index PDF eBook |
Author | Hites Ahir |
Publisher | International Monetary Fund |
Pages | 132 |
Release | 2023-10-20 |
Genre | Business & Economics |
ISBN |
This paper uses text analysis to construct a continuous financial stress index (FSI) for 110 countries over each quarter during the period 1967-2018. It relies on a computer algorithm along with human expert oversight and is thus easy to update. The new indicator has a larger country and time coverage and higher frequency than similar measures focusing on advanced economies. And it complements existing binary chronologies in that it can assess the severity of financial crises. We use the indicator to assess the impact of financial stress on the economy using both country- and firm-level data. Our main findings are fivefold: i) consistent with existing literature, we show an economically significant and persistent relationship between financial stress and output; ii) the effect is larger in emerging markets and developing economies and (iii) for higher levels of financial stress; iv) we deal with simultaneous causality by constructing a novel instrument—financial stress originating from other countries—using information from the text analysis, and show that, while there is clear evidence that financial stress harms economic activities, OLS estimates tend to overestimate the magnitude of this effect; (iv) we confirm the presence of an exogenous effect of financial stress through a difference-in-differences exercise and show that effects are larger for firms that are more financially constrained and less profitable.
Financial Stress, Monetary Policy, and Economic Activity
Title | Financial Stress, Monetary Policy, and Economic Activity PDF eBook |
Author | Fuchun Li |
Publisher | |
Pages | |
Release | 2010 |
Genre | |
ISBN |
Dynamics of Financial Stress and Economic Performance
Title | Dynamics of Financial Stress and Economic Performance PDF eBook |
Author | Ramesh Babu Thimmaraya |
Publisher | Emerald Group Publishing |
Pages | 205 |
Release | 2018-09-28 |
Genre | Business & Economics |
ISBN | 1787547833 |
This book primarily focuses on the dynamic relationship between the financial and the economic systems of twelve major economies in the world.
Financial Stress, Monetary Policy, and Economic Activity
Title | Financial Stress, Monetary Policy, and Economic Activity PDF eBook |
Author | Fuchun Li |
Publisher | |
Pages | 0 |
Release | 2010 |
Genre | |
ISBN |
Financial Uncertainty and Real Activity
Title | Financial Uncertainty and Real Activity PDF eBook |
Author | Giovanni Caggiano |
Publisher | |
Pages | |
Release | 2020 |
Genre | |
ISBN |
This paper quantifies the finance uncertainty multiplier (i.e., the magnifying effect of the real impact of uncertainty shocks due to financial frictions) by relying on two historical events related to the US economy, i.e., the large jump in financial uncertainty occurred in October 1987 (which was not accompanied by a deterioration of the credit supply conditions), and the comparable jump in financial uncertainty in September 2008 (which went hand-in-hand with an increase in financial stress). Working with a VAR framework and a set-identification strategy which focuses on - but it is not limited to - restrictions related to these two dates, we estimate the finance uncertainty multiplier to be equal to 2, i.e., credit supply disruptions are found to double the negative output response to an uncertainty shock. We then employ our model to estimate the overall economic cost of the COVID-19-induced uncertainty shock under different scenarios. Our results point to the possibility of a cumulative yearly loss of industrial production as large as 31% if credit supply gets disrupted. Liquidity interventions that keep credit conditions as healthy as they were before the COVID-19 uncertainty shock are found to substantially reduce such loss.
Financial Stress, Monetary Policy, and Economic Activity. May 2010
Title | Financial Stress, Monetary Policy, and Economic Activity. May 2010 PDF eBook |
Author | Bank of Canada |
Publisher | |
Pages | 31 |
Release | 2010 |
Genre | |
ISBN |