术语表 网站地图    中文版
About PBC | Management Team | Former Governors | News | Speeches | Monetary Policy | Financial Market | Survey & Stat. | Regulations | Financial Stability | Publications | Working Paper | Links | 
Adv.Search
     |  You are here:Home > Working Paper > 2016

WP No.2016/5   Do Financial Cycle and Volatility Affect Economic Growth and Financial Stability

Font Size Big Medium Small 2016年04月08日
print  close

Abstract: Based on dynamic panel data of 68 major economies over the period of 1981-2012, this paper investigates the impact of financial cycle and financial volatility on economic growth and financial stability. The empirical results show that the boom and recession phases of the financial cycle are often associated with lower economic growth and higher probability of financial crisis. By comparison, in the normal phase of the financial cycle, economic growth is higher and the financial system is more stable. This indicates that both the overheating and overcooling of the financial system is harmful to economic growth and financial stability, and the reverse is true vice versa. In addition, no matter what phases the financial cycle is in, larger financial volatility is always associated with lower economic growth and higher probability of financial crisis, suggesting that the increase in financial volatility is harmful to both economic growth and financial stability.

Full report :WP No.20165 Do Financial Cycle and Volatility Affect Economic Growth and Financial Stability.pdf

print close