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Financial and economic downturns in OECD countries

Author

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  • Markus Haavio
  • Caterina Mendicino
  • Maria Teresa Punzi

Abstract

This article empirically studies the linkages between financial variable downturns and economic recessions. We present evidence that real asset prices tend to lead real cycles, while loan-to-GDP and loan-to-deposit ratios lag them. Using a probit anaylsis, we document that downturns in real asset prices, particularly real house prices, are useful leading indicators of economic recessions.

Suggested Citation

  • Markus Haavio & Caterina Mendicino & Maria Teresa Punzi, 2014. "Financial and economic downturns in OECD countries," Applied Economics Letters, Taylor & Francis Journals, vol. 21(6), pages 407-412, April.
  • Handle: RePEc:taf:apeclt:v:21:y:2014:i:6:p:407-412
    DOI: 10.1080/13504851.2013.864025
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    References listed on IDEAS

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    1. repec:bla:abacus:v:53:y:2017:i:1:p:59-93 is not listed on IDEAS

    More about this item

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation

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