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Does global financial cycle drive systemic risk?
MGIMO Univ, Russia.
Natl Res Univ Higher Sch Econ, Russia.
Linköping University, Department of Management and Engineering, Economics. Linköping University, Faculty of Arts and Sciences.
2021 (English)In: Economics Bulletin, E-ISSN 1545-2921, Vol. 41, no 4, p. 2320-2329Article in journal (Refereed) Published
Abstract [en]

The paper studies the relationship between a financial cycle proxy and conditional capital shortfall (SRISK), a popular systemic risk measure, at the global level. Based on causal and directional dependence analyses in the time and time-frequency domains, we find that global financial cycle (GFC) drives SRISK. Besides, the GFC variable appears more useful in forecasting world industrial production. The results emphasize the GFC relevance for monitoring financial stability and forecasting crises relative to narrow systemic risk measures.

Place, publisher, year, edition, pages
ECONOMICS BULLETIN , 2021. Vol. 41, no 4, p. 2320-2329
National Category
Economics
Identifiers
URN: urn:nbn:se:liu:diva-189978ISI: 000873112100012OAI: oai:DiVA.org:liu-189978DiVA, id: diva2:1711300
Available from: 2022-11-16 Created: 2022-11-16 Last updated: 2024-02-19

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