Author: Philip Lane

Due to various absences, the blog will be mostly unattended until next Thursday.  Until then, all comments will be held for moderation (some of the accumulated queue might be cleared in the meantime but no promises.)

There is a new IMF working paper on this topic – available here.

Summary: 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.

Lars Calmfors and Simon Wren-Lewis write on this topic in this VOX article.

In turn, this is based on a more detailed paper which is available here.

Tyler Cowen writes on the euro in this NYT article.

Donal Palcic and Eoin Reeves from UL have authored a new book on this topic: details here.