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How Do Business and Financial Cycles Interact
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In this article, the interactions between business and financial cycles using an extensive database of over 200 business and 700 financial cycles in 44 countries for the period 1960:1-2007:4.Abstract:
This paper analyzes the interactions between business and financial cycles using an extensive database of over 200 business and 700 financial cycles in 44 countries for the period 1960:1-2007:4. Our results suggest that there are strong linkages between different phases of business and financial cycles. In particular, recessions associated with financial disruption episodes, notably house price busts, tend to be longer and deeper than other recessions. Conversely, recoveries associated with rapid growth in credit and house prices tend to be stronger. These findings emphasize the importance of developments in credit and housing markets for the real economy.read more
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Credit and business cycles’ relationship: evidence from Spain
TL;DR: In this article, the authors studied the relationship between business and credit cycles in Spain during the period 1970-2014 and found that there is a correlation between the business cycle and credit cycle.
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Measuring financial cycles: Empirical evidence for Germany, United Kingdom and United States of America
TL;DR: In this paper , four financial variables were included in the study: Credit, House Prices, Share Prices and Interest Rates, and three methods, namely the Concordance Index, the Granger Causality Test and the AUROC Test, were used to identify which of the four variables is the most accurate proxy to measure and estimate financial cycles.
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Debt-driven business cycles in historical perspective: The cases of the USA (1889-2015) and UK (1882-2010)
TL;DR: In this paper, the authors investigate whether business cycles are driven by corporate debt and/or by mortgage debt, and they find robust evidence of endogenous corporate debt-driven cycles for the USA, weak evidence of mortgage debt driven cycles in the USA and no evidence of corporate or mortgage debt-dependent cyclologies for the UK.
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Sowing the seeds of financial imbalances: The role of macroeconomic performance
TL;DR: This article found that strong economic growth is followed by a buildup of financial imbalances across all dimensions of the National Financial Conditions Index, and that the link between strong economic performance and increases in non-financial leverage is particularly strong and robust.
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Book
General Theory of Employment, Interest and Money
TL;DR: In this article, a general theory of the rate of interest was proposed, and the subjective and objective factors of the propensity to consume and the multiplier were considered, as well as the psychological and business incentives to invest.
Journal ArticleDOI
Bank Runs, Deposit Insurance, and Liquidity
TL;DR: The authors showed that bank deposit contracts can provide allocations superior to those of exchange markets, offering an explanation of how banks subject to runs can attract deposits, and showed that there are circumstances when government provision of deposit insurance can produce superior contracts.
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The Financial Accelerator in a Quantitative Business Cycle Framework
TL;DR: This article developed a dynamic general equilibrium model that is intended to help clarify the role of credit market frictions in business fluctuations, from both a qualitative and a quantitative standpoint, and the model is a synthesis of the leading approaches in the literature.
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This Time Is Different: Eight Centuries of Financial Folly
Carmen Reinhart,Kenneth Rogoff +1 more
TL;DR: This Time Is Different as mentioned in this paper presents a comprehensive look at the varieties of financial crises, and guides us through eight astonishing centuries of government defaults, banking panics, and inflationary spikes.
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Agency Costs, Net Worth, And Business Fluctuations
Ben S. Bernanke,Mark Gertler +1 more
TL;DR: The authors constructs a simple neoclassical model of intrinsic business cycle dynamics in which borrowers' balance sheet positions play an important role and shows that the agency costs of undertaking physical investments are inversely related to the entrepreneur's/borrower's net worth.