Abstract

http://ssrn.com/abstract=1853125
 
 

References (18)



 
 

Citations (12)



 


 



How Do Business and Financial Cycles Interact?


Stijn Claessens


International Monetary Fund (IMF); University of Amsterdam - Finance Group; Centre for Economic Policy Research (CEPR); Tinbergen Institute; European Corporate Governance Institute (ECGI)

M. Ayhan Kose


International Monetary Fund (IMF)

Marco E. Terrones


International Monetary Fund (IMF)

May 2011

CEPR Discussion Paper No. DP8396

Abstract:     
This paper analyzes the interactions between business and financial cycles using an extensive database of over 200 business and 700 financial cycles in 44 countries for the period 1960:1-2007:4. Our results suggest that there are strong linkages between different phases of business and financial cycles. In particular, recessions associated with financial disruption episodes, notably house price busts, tend to be longer and deeper than other recessions. Conversely, recoveries associated with rapid growth in credit and house prices tend to be stronger. These findings emphasize the importance of developments in credit and housing markets for the real economy.

Number of Pages in PDF File: 55

Keywords: asset busts, booms, credit crunches, financial crises, recessions, recoveries

JEL Classification: E32, E44, E51, F42

working papers series


Date posted: May 26, 2011  

Suggested Citation

Claessens, Stijn and Kose, M. Ayhan and Terrones, Marco E., How Do Business and Financial Cycles Interact? (May 2011). CEPR Discussion Paper No. DP8396. Available at SSRN: http://ssrn.com/abstract=1853125

Contact Information

Stijn Claessens (Contact Author)
International Monetary Fund (IMF) ( email )
700 19th Street NW
Washington, DC 20431
United States
202-623-7641 (Phone)
202-5897641 (Fax)
University of Amsterdam - Finance Group ( email )
Roetersstraat 18
Amsterdam, 1018 WB
Netherlands
+31 20 525 6020 (Phone)
+31 20 525 5285 (Fax)
HOME PAGE: http://www.fee.uva.nl/fm/index.htm
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
Tinbergen Institute ( email )
Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands
European Corporate Governance Institute (ECGI)
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
HOME PAGE: http://www.ecgi.org
M. Ayhan Kose
International Monetary Fund (IMF) ( email )
700 19th Street, N.W.
Washington, DC 20431
United States
202-623-7000 (Phone)
202-623-4661 (Fax)
HOME PAGE: http://ideas.repec.org/e/pko65.html
Marco E. Terrones
International Monetary Fund (IMF) ( email )
700 19th Street NW
Washington, DC 20431
United States
202-623-4329 (Phone)
HOME PAGE: http://imf.org/external/np/CV/AuthorCV.aspx?AuthID=171
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References:  18
Citations:  12

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