Financial and economic downturns in OECD countries

Markus Haavio, Caterina Mendicino and Maria Teresa Punzi

No 35/2013, Bank of Finland Research Discussion Papers from Bank of Finland

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 (search for similar items in EconPapers)
JEL-codes: C53 E32 E37 G17 (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:bofrdp:rdp2013_035

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