Financial and Economic Downturns in OECD Countries
19 Pages Posted: 13 Mar 2014
Date Written: December 19, 2013
Abstract
This article empirically studies the linkages between financial variable downturns and economic recessions. We present evidence that real asset prices tend to lead real cycles, while loan-to-GDP and loan-to-deposit ratios lag them. Using a probit analysis, we document that downturns in real asset prices, particularly real house prices, are useful leading indicators of economic recessions.
Keywords: macro-financial linkages, turning point analysis, probit models
JEL Classification: C53, E32, E37, G17
Suggested Citation: Suggested Citation
Haavio, Markus and Mendicino, Caterina and Punzi, Maria Teresa, Financial and Economic Downturns in OECD Countries (December 19, 2013). Bank of Finland Research Discussion Paper No. 35/2013, Available at SSRN: https://ssrn.com/abstract=2370285 or http://dx.doi.org/10.2139/ssrn.2370285
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