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Firms and Consumers in the Financial Crisis - Effects, Reactions, and Outlooks

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  • Ali-Yrkkö, Jyrki
  • Kotiranta, Annu
  • Nikulainen, Tuomo
  • Pajarinen, Mika
  • Rouvinen, Petri

Abstract

In order to shed light on the consequences of the ongoing financial crisis, ETLA conducted two surveys at the end of October 2008. The firm survey targeted firms employing at least 10 persons in Finland (2,017 observations with a response rate of 33%) and the consumer survey targeted 1574-year-old Finns (2,025 observations with a response rate of 37%). More than half of the firms say that their sales/orders are down due to the financial crisis. In virtually all dimensions manufacturing fares worse than services. In part this is due to the fact that business-to-business and foreign markets seem to be experiencing more problems than consumer and domestic markets. If the situation continues, the problems will undoubt-edly spread. Our observations suggest that in the Finnish case the demand-induced effects will be more several than those directly attributable to problems in attracting external finance. Unless the October 2008 deepening in the crisis, which is now felt by all firms and consumers, is reversed shortly, the effects will accumulate and lead to a recession.

Suggested Citation

  • Ali-Yrkkö, Jyrki & Kotiranta, Annu & Nikulainen, Tuomo & Pajarinen, Mika & Rouvinen, Petri, 2008. "Firms and Consumers in the Financial Crisis - Effects, Reactions, and Outlooks," Discussion Papers 1158, The Research Institute of the Finnish Economy.
  • Handle: RePEc:rif:dpaper:1158
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    References listed on IDEAS

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    More about this item

    Keywords

    financial crisis; consumer survey; firm survey; behavior; Finland;

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • Y1 - Miscellaneous Categories - - Data: Tables and Charts

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