The Persistent Effects of the Temporary Tightening in Financial Conditions

Brent Bundick

Economic Bulletin, 2019, issue April 17, 2019, 4

Abstract: Market-based measures of uncertainty, a common proxy for broader financial conditions, rose sharply in the fourth quarter of 2018 but have retreated to more normal levels over the last few months. While the recent increase in uncertainty was brief, the temporary tightening in financial conditions will likely have longer-lasting effects on economic activity and prices.

Keywords: Chicago Board Options Exchange Volatility Index; VIX; Equity Markets; Uncertainty Measures; Financial Conditions (search for similar items in EconPapers)
JEL-codes: G10 G12 (search for similar items in EconPapers)
Date: 2019
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