Research Discussion Papers, Bank of Finland
No 25/1992:
Bankruptcies and Aggregate Economic Fluctuations
Christian Starck and Matti Viren ()
Abstract: This paper explores the determinants of aggregate economic
fluctuations in Finland. The analysis makes use of aggregate monthly time
series for some financial and non-financial variables covering the period
1922–1990. In particular, we scrutinize the role of bankruptcies in the
propagation mechanism of aggregate economic shocks. In analyzing the role
of bankruptcies we also try to find out whether money or credit helps more
in predicting the movements in corporate failures and overall economic
activity. The empirical analyses indicate that bankruptcies constitute an
important ingredient as regards the determination of other variables. It
also turns out that overall liquidity and firm failures are closely
related. In comparing money and credit the former appears to be much more
important as regards the propagation mechanism. We also find that the basic
relationships are strikingly stable over long periods. Finally, we find
some evidence of non-linearities in the financial and non-financial time
series.
Keywords: business cycles; bankruptcy; time series models; (follow links to similar papers)
19 pages, September 8, 1992
Before downloading any of the electronic versions below
you should read our statement on
copyright.
Download GhostScript
for viewing Postscript files and the
Acrobat Reader for viewing and printing pdf files.
Full text versions of the paper:
DP_25_1992.pdf 
Download Statistics
Questions (including download problems) about the papers in this series should be directed to Minna Nyman ()
Report other problems with accessing this service to Sune Karlsson ()
or Helena Lundin ().
Programing by
Design by Joachim Ekebom
