How global risk perceptions affect economic growth
January 13, 2022
The relationship between financial risk and economic growth is complex. This column finds that perceptions of high risk unambiguously harm growth, while perceived low risk has an initial positive impact, which eventually turns negative. Global risk has a stronger effect on growth than local risk, via its impact on capital flows, investment, and debt-issuer quality, challenging monetary policy independence.
Published on VoxEU.org
The central banks' Catch-22
Models and risk
Bloggs and appendices on artificial intelligence, financial crises, systemic risk, financial risk, models, regulations, financial policy, cryptocurrencies and related topics© All rights reserved, Jon Danielsson,