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The economic impact of financial events: an all-or-nothing phenomenon
[L’impact économique des chocs financiers : le principe du tout-ou-rien]

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  • Stéphane Lhuissier

Abstract

The 2008 financial crisis and the sovereign debt crisis in the euro area led to major recessions. By contrast, the macroeconomic impact of the bursting of the technology bubble in 2000 was mild. The reason behind these all-or-nothing effects is amplification: a fragile financial system makes economic agents more sensitive to changes in financial conditions. La crise financière de 2008 et la crise de la dette souveraine dans la zone euro ont entraîné des récessions majeures, alors que l’éclatement de la bulle technologique en 2000 n’a eu qu’un impact macroéconomique modéré. Ce principe du « tout ou rien » résulte du phénomène d’amplification : dans un système financier fragile, les agents sont plus sensibles aux changements des conditions financières.

Suggested Citation

  • Stéphane Lhuissier, 2018. "The economic impact of financial events: an all-or-nothing phenomenon [L’impact économique des chocs financiers : le principe du tout-ou-rien]," Eco Notepad (in progress) 83, Banque de France.
    • Handle: RePEc:bfr:econot:83
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