Template-Type: ReDIF-Paper 1.0
Author-Name:  Burcu Erik
Author-X-Name-First:  Burcu
Author-X-Name-Last:  Erik
Author-Name: Marco Jacopo Lombardi
Author-X-Name-First: Marco Jacopo
Author-X-Name-Last: Lombardi
Author-Name: Dubravko Mihaljek
Author-X-Name-First: Dubravko 
Author-X-Name-Last: Mihaljek
Author-Name: Hyun Song Shin
Author-X-Name-First: Hyun
Author-X-Name-Last: Song Shin
Title: The dollar, bank leverage and real economic activity: an evolving relationship
Abstract: The interest in how financial conditions affect real economic activity has grown since the Great Financial Crisis (GFC), not least because some of the mechanisms at play in the financial sector may have changed. We shed light on this issue by examining the empirical relationship between global Purchasing Managers' Indices, world trade and indicators of global financial conditions, with a special focus on the broad dollar index. We show that the influence of the dollar on real economic activity and global trade seems to have increased since the GFC, while that of the VIX has decreased.
Length: 18 pages
Creation-Date: 2020-03
File-URL: https://www.bis.org/publ/work847.pdf
File-Format: Application/pdf
File-Function: Full PDF document
File-URL: https://www.bis.org/publ/work847.htm
File-Format: text/html
Number: 847
Classification-JEL: C5, E2, F3, F4, F6
Keywords: financial conditions, economic activity, world trade, dollar exchange rate, bank leverage, purchasing managers' indices, nowcasting, global supply chains
Handle: RePEc:bis:biswps:847