The Financial Cycle and Macroeconomics: What Have We Learnt?

By C. Borio. 2014

1,070 citations recorded by the source corpus.

Subfields: Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/d67a9483f3a38968e72ae2960275c5fd9e602c52

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

1. M. Obstfeld
2. Luca A Ricci
3. C. Detken
4. M. Bordo
5. Lilit Popoyan
6. Miguel Boucinha
7. Jon Frost
8. J. Cizel

In Finance

1. M. Obstfeld
2. M. Bordo
3. J. D. Giovanni
4. Lilit Popoyan
5. Miguel Boucinha
6. C. Detken
7. Jon Frost
8. J. Cizel

Citations in the corpus

• A Fisherian approach to financial crises: Lessons from the Sudden Stops literature (2020, neutral): “…with capital accumulation and working-capital financing added to the credit constraint (Mendoza, 2010), models of learning and financial innovation (Boz and Mendoza, 2014), exchange-rate policy (Fornaro, 2018), studies on the effects of financial policies and financial integration (Durdu and…”
• The Effect of the Global Financial Crisis on OECD Potential Output (2015, neutral): “While this approach has the merit of being transparent, it will not necessarily insulate the pre-crisis trend from any immediate pre-crisis boom if there is a protracted run-up prior to the financial crisis as typically seems to be the case (Borio, 2012).”
• The External Balance Assessment (EBA) Methodology (2013, background): “It is interesting that there is evidence of an effect of private credit even while controlling for the output gap, probably because economic cycles do not generally coincide with financial cycles (see for example Borio (2012).”
• Trilemmas and trade-offs: living with financial globalisation (2015, background): “On the importance of financing conditions as reflected in gross capital flows, see Borio and Disyatat (2011). 5 For some evidence suggesting that this is the case, and that net private capital inflows are likely to create more financial fragility in economies with less flexible exchange rate regimes”
• Identification of Financial Factors in Economic Fluctuations (2019, neutral): “…alternative measures of central tendency in which the variance decomposition does not require any normalization. factors (mainly labour supply) is often embedded in macroeconomic models, the importance of financial factors for long-run dynamics has been discussed only recently (cf. Borio, 2012).”
• Rethinking Potential Output: Embedding Information About the Financial Cycle (2013, neutral): “During such times, the overhang of debt makes the task of reshuffling capital and labour harder, hindering the correction of the resource misallocations built-up during the boom (eg Hall (2012), Borio (2012)).”
• Fostering green investments and tackling climate-related financial risks: Which role for macroprudential policies? (2019, background): “2With term “Basel”, we refer to the so-called Basel Accords, which are banking regulation agreements related to capital, market and operational risks, issued by the Basel Committee on Banking Supervision (Switzerland) (see Borio, 2003, 2014, among others).”
• Rising inequality as a cause of the present crisis (2015, background): “First, there is a growing interest in debt-cycle and debt-deflation models (Jordá et al., 2011; Borio, 2012; Eggertsson and Krugman, 2012).”
• Dating systemic financial stress episodes in the EU countries (2017, background): “…signs of banking distress, and (ii) the presence of significant bank- 1While there is no consensus on the definition of the financial cycle, Borio (2014) characterises it as “self-reinforcing interactions between perceptions of value and risk, attitudes towards risk and financing…”
• Does Expansionary Monetary Policy Cause Asset Price Booms; Some Historical and Empirical Evidence (2013, positive): “In this vein Borio (2012) discusses a financial cycle based on property prices and credit growth which has much greater amplitude than the business cycle and when its peak coincides with a business cycle peak, a housing bust, banking crisis and deep protracted recession can follow, as occurred in 20”
• Sentiment in Central Banks’ Financial Stability Reports* (2017, positive): “X contains two variables commonly used in the literature as predictors of banking crises: the credit-to-GDP gap and the debt service ratio for private nonfinancial corporations (see Drehmann et al., 2015; and Borio, 2014).”
• Operationalising the Countercyclical Capital Buffer: Indicator Selection, Threshold Identification and Calibration Options (2014, background): “The review of the financial cycle by Borio (2012) suggests that the business cycle involves frequencies from one to eight years, whereas the average length of the financial cycle in his sample of seven industrialised countries since the 1960s has been around 16 years.”
• Finance, climate-change and radical uncertainty: Towards a precautionary approach to financial policy (2021, background): “…of a much stronger financial stability mandate since the GFC, central banks have started to think in longer time horizons themselves, in particular focusing on the ‘credit’ or ‘financial cycle’, which is typically estimated to be anywhere between 10 and 16 years (Borio, 2014; Aikman et al., 2015).”
• Effective Macroprudential Policy: Cross‐Sector Substitution from Price and Quantity Measures (2016, background): “Our focus is on MaPs that address the time dimension of systemic risk, that is, the endogenous build-up of systemic risk over the financial cycle (Borio 2014).”