Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/82451
Authors: 
Hansen, Jan
Year of Publication: 
2003
Series/Report no.: 
Sveriges Riksbank Working Paper Series 149
Abstract: 
This paper studies the relationship between macroeconomic imbalances and bankruptcies in the Nordic countries. Finland, Sweden, Norway and Denmark liberalised their financial markets during the 1980s and experienced the consecutive emergence of a financial cycle, followed by severe banking crises. Cointegration analysis and Granger causality tests suggest that the joint path of credit, house prices and possibly investment in construction relative to GDP creates macroeconomic imbalances and has high predictive power for bankruptcies. House prices appear to be most important. Several empirical results appear to be similar for Sweden, Finland and Norway, while patterns for Denmark often differ. The estimations indicate that macroeconomic imbalances were small at the end of 2001 in all four countries.
Subjects: 
Macroeconomic imbalances
financial distress
VAR model
cointegration
JEL: 
C22
E32
E44
Document Type: 
Working Paper

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