Expected worsening or improving financial instability and the 2008 financial crisis
AbstractWe focus on the external sector component of financial instability and link changes in country imbalances to GDP growth rates in ways to produce indices of expected worsening or improving financial instability at different points in time. Our results suggest that depending upon the index used and the base date chosen for comparison, different implications emerge for the linkage between external sector imbalances, perceived future instability and hence the possible onset of a financial crisis. The implication we drawn is that links between imbalances and best policy response to 2008 crisis asserted by the G20 may be more tenuous than claimed.
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Bibliographic InfoArticle provided by Elsevier in its journal The North American Journal of Economics and Finance.
Volume (Year): 26 (2013)
Issue (Month): C ()
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Web page: http://www.elsevier.com/locate/inca/620163
External sector imbalances; Financial instability; Index approach; Financial crisis;
Find related papers by JEL classification:
- F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
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