Monitoring Financial Stability: A Financial Conditions Index Approach
22 Pages Posted: 11 Feb 2011
Date Written: February 9, 2011
Monitoring financial stability requires an understanding of both how traditional and evolving financial markets relate to each other and how they relate to economic conditions. This article describes two new indexes of financial conditions that aim to quantify these relationships.
Keywords: Financial Conditions, Financial Crises, Financial Stress, Principal Component Analysis, Dynamic Factor Analysis, Financial Forecasting And Simulation, Index Numbers And Aggregation
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