 Non linear and asymmetric linkages between real growth in the Euro area and global financial market conditions: New evidenceMehdi Mili (), Jean-Michel Sahut and Frédéric Teulon Economic Modelling, 2012, vol. 29, issue 3, 734-741 Abstract: This paper deals with transition mechanisms through which financial market conditions affect real economic growth in the Euro area. The informational content of financial variables for predicting real economic growth is assessed, allowing for asymmetric responses to shocks. A nonlinear framework is developed based on a smooth transition model for which the effects of shocks can vary across business cycles when financial indicators modify both the endogenous and state variables. Global financial variables are shown to significantly affect real growth in the Euro area, particularly during periods of recession. Changes in stock market index and yield slope have asymmetric effects on real growth. In recessionary periods, the slope of the US yield curve does not have a significant impact on growth in the Euro area. Keywords: Smooth transition models; Nonlinear models; Economic growth; Business cycle; Stock market; Yield spread (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:29:y:2012:i:3:p:734-741 DOI: 10.1016/j.econmod.2012.01.008 Access Statistics for this article Economic Modelling is currently edited by S. Hall and P. Pauly More articles in Economic Modelling from Elsevier |
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