Aizenman, Joshua
[VerfasserIn]
;
Pinto, Brian
[Sonstige Person, Familie und Körperschaft];
Sushko, Vladyslav
[Sonstige Person, Familie und Körperschaft]National Bureau of Economic Research
Financial sector ups and downs and the real sector
: big hindrance, little help
Erschienen:
Cambridge, MA: National Bureau of Economic Research, 2011 2011
Erschienen in:NBER working paper series ; working paper 17530
Umfang:
Online-Ressource
Sprache:
Englisch
DOI:
10.1596/1813-9450-5860
Identifikator:
Reproduktionsreihe:
World Bank eLibrary
Reproduktionsnotiz:
Also available in print
Entstehung:
Anmerkungen:
Includes bibliographical references
Title from PDF file as viewed on 1/5/2012
Mode of access: World Wide Web
System requirements: Adobe Acrobat Reader
Beschreibung:
"We examine how financial expansion and contraction cycles affect the broader economy through their impact on 8 real economic sectors in a panel of 28 countries over 1960-2005, paying particular attention to large, or sharp, contractions and magnifying and mitigating factors. Overall, the construction sector is the most responsive to financial sector growth, with a number of others such as government, public utilities, and transportation also exhibiting significant sensitivity to lagged financial sector growth. Sharp fluctuations in the financial sector have asymmetric effects, with the majority of real sectors adversely affected by contractions but not helped by expansions. The adverse effects of financial contractions are transmitted almost exclusively by the financial openness channel with foreign reserves mitigating these effects with a sizeable (10 to 15 times greater) impact during sharp financial contractions. Both effects are magnified during particularly large financial contractions (with coefficients on interaction terms 2 to 3 times greater than when all contractions are considered). Consequent upon a financial contraction, the most severe real sector contractions occur in countries with high financial openness, relative predominance of construction, manufacturing, and wholesale and retail sectors, and low international reserves. Finally, we find that abrupt financial contractions are more likely to follow periods of accelerated growth, indicative of "up by the stairs, down by the elevator dynamics.""--National Bureau of Economic Research web site