Quantifying the Effect of Financial Conditions on US Activity: = Une mesure de l'impact des conditions financières sur l'activité aux États-Unis

This paper constructs a broad measure of financial conditions for the United States which suggests that since the onset of the credit crisis there has been a marked tightening in financial conditions, despite a substantial easing of policy rates and a depreciation of the dollar. This measure of over...

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Bibliographic Details
Main Author: Guichard, Stéphanie (Author)
Other Authors: Turner, David (Contributor)
Format: Electronic eBook
Language:English
Published: Paris OECD Publishing 2008
Series:OECD Economics Department Working Papers no.635
Subjects:
Online Access:DE-862
DE-863
Summary:This paper constructs a broad measure of financial conditions for the United States which suggests that since the onset of the credit crisis there has been a marked tightening in financial conditions, despite a substantial easing of policy rates and a depreciation of the dollar. This measure of overall financial conditions includes interest rate spreads for riskier borrowers and a survey measure of the tightness of bank lending standards, which have been the main drivers behind the tightening in financial conditions. Indeed, recent data suggest that the trend deterioration in overall financial conditions has continued into the second half of 2008. The effect of the tightening in overall financial conditions already experienced may subtract 1¾ per cent from GDP over the next four to six quarters. Not only have financial conditions continued to worsen, but much of the impact on the real economy has yet to be felt.
Physical Description:1 Online-Ressource (19 Seiten) 21 x 29.7cm.

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