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Financial Conditions: Do the Ups and Downs Affect the Rest of the Economy?

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  • Hee Sung Kim
  • Juan M. Sanchez

Abstract

Do changes in the conditions of financial markets lead to changes in real economic activity? This question can be answered by analyzing the ups and downs in sales and investments of firms with different needs of external financing. The evidence suggests the causal effect is small.

Suggested Citation

  • Hee Sung Kim & Juan M. Sanchez, 2017. "Financial Conditions: Do the Ups and Downs Affect the Rest of the Economy?," The Regional Economist, Federal Reserve Bank of St. Louis, vol. 25(1).
    • Handle: RePEc:fip:fedlre:00133
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