Financial Stress and Economic Activity

Year 2008, Volume: 2 Issue: 2, 11 - 24, 01.12.2008

Stijn Claessens M. Ayhan Köse Marco E. Terrones

Abstract

This paper briefly summarizes the results presented in Claessens, Köse and Terrones (2008a, 2008b) to provide a set of basic stylized facts about the linkages between macroeconomic and financial variables during recessions and episodes of financial stress, including the periods of credit crunches and asset (house and equity) price busts. The analysis employs a comprehensive database of key macroeconomic and financial variables for 21 OECD countries over the 1960-2007 period. The results indicate that recessions following periods of financial
stress are often longer and deeper than other recessions are. The paper concludes with a short discussion of the implications of its findings for the current crisis. 

Keywords

Financial Stress, Economic Activity, Business Cycles

Özet - Finansal Stres ve Ekonomik Aktivite

Abstract

Keywords

Finansal Stres Dönemleri, Ekonomik Aktivite, İş Çevrimleri

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