The dollar, bank leverage and real economic activity: an evolving relationship

Burcu Erik, Marco Lombardi, Dubravko Mihaljek () and Hyun Song Shin

No 847, BIS Working Papers from Bank for International Settlements

Abstract: The interest in how financial conditions affect real economic activity has grown since the Great Financial Crisis (GFC), not least because some of the mechanisms at play in the financial sector may have changed. We shed light on this issue by examining the empirical relationship between global Purchasing Managers' Indices, world trade and indicators of global financial conditions, with a special focus on the broad dollar index. We show that the influence of the dollar on real economic activity and global trade seems to have increased since the GFC, while that of the VIX has decreased.

Keywords: financial conditions; economic activity; world trade; dollar exchange rate; bank leverage; purchasing managers' indices; nowcasting; global supply chains (search for similar items in EconPapers)
JEL-codes: C5 E2 F3 F4 F6 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2020-03
New Economics Papers: this item is included in nep-ifn and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
https://www.bis.org/publ/work847.pdf Full PDF document (application/pdf)
https://www.bis.org/publ/work847.htm (text/html)

Related works:
Journal Article: The Dollar, Bank Leverage, and Real Economic Activity: An Evolving Relationship (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bis:biswps:847

Access Statistics for this paper

More papers in BIS Working Papers from Bank for International Settlements Contact information at EDIRC.
Bibliographic data for series maintained by Martin Fessler ().