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

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  • Iulia Lupu

    (Financial and Monetary Research Centre ”Victor Slavescu”, Bucharest)

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.

Suggested Citation

  • Iulia Lupu, 2012. "From the Financial Crisis to the Real Economy: the Main Channels of Transmission through a Theoretical Perspective," EuroEconomica, Danubius University of Galati, issue 2(31), pages 45-50, May.
    • Handle: RePEc:dug:journl:y:2012:i:2:p:45-50
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    File URL: http://journals.univ-danubius.ro/index.php/euroeconomica/article/view/1286/1155
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    References listed on IDEAS

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    Cited by:

    1. Alymkulova Nargiza Bakytovna & Atabaev Nurlan Uzgenovich & Ganiev Junus Mashrapovich, 2016. "Var - analysis of Global financial economic crisis impact on public budget and unemployment: evidence from the economy of the Kyrgyz Republic," Экономика региона, CyberLeninka;Федеральное государственное бюджетное учреждение науки «Институт экономики Уральского отделения Российской академии наук», vol. 12(4), pages 1090-1101.
    2. Nargiza Alymkulova & Nurlan Atabaev & Junus Ganiev, 2016. "Var — analysis of global financial economic crisis impact on public budget and unemployment: evidence from the economy of the Kyrgyz republic," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(4), pages 1090-1101.

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