From the Financial Crisis to the Real Economy: the Main Channels of Transmission through a Theoretical Perspective

Iulia Lupu

EuroEconomica, 2012, issue 2(31), 45-50

Abstract: In the financial sector, due to the structure of the involved companies, the sophisticated network of exposures among institutions, the related credibility problems and the inter-temporal character of financial contracts contagion phenomenon is hence considered a noteworthy topic in the scientific discussions. Understanding the transmission channels that exist between the financial and real sectors of the economy is critically important when assessing financial stability and economic growth. Identifying three categories of transmission channels (the interest rate channel, the wealth effect, and the financial accelerator) that exist between the financial and the real sector, this paper comment the literature on this issue and present some original observations. The current financial crisis by tighten the financing conditions, by falling houses’ and financial assets’ prices, by damaging growth prospects, has a devastating negative impact on the financial situation of firms and households.

Keywords: contagion; shocks; accelerator mechanism (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://journals.univ-danubius.ro/index.php/euroeconomica/article/view/1286/1155 (application/pdf)

Related works:
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:dug:journl:y:2012:i:2:p:45-50

Access Statistics for this article

More articles in EuroEconomica from Danubius University of Galati Contact information at EDIRC.
Bibliographic data for series maintained by Florian Nuta ().