IDEAS home Printed from https://ideas.repec.org/a/cup/macdyn/v24y2020i1p69-92_5.html
   My bibliography  Save this article

Structural Differences In The Eurozone: Measuring Financial Stability By Fci

Author

Listed:
  • Foglia, Matteo
  • Cartone, Alfredo
  • Fiorelli, Cristiana

Abstract

In this paper, we apply two novel methodological approaches, Tucker three-way principal component analysis and locally weighted principal component analysis, to construct financial conditions index for Eurozone countries. The aim is to point out how real and financial macroeconomic variables affect the credit channel and which variables are more relevant in each occasion, highlighting structural differences within the Eurozone. The results suggest that the Eurozone is involved into a low easing pattern, which is difficult to reverse and affects considerably the financial conditions, surrounding the hypothesis that this pattern has been worsened by structural differences between the European Monetary Union (EMU) countries. Empirical evidence shows that European Central Bank (ECB) policy has managed to cool financial tensions and has made financial conditions homogeneous, but it has not been able to restore them at a precrisis level.

Suggested Citation

  • Foglia, Matteo & Cartone, Alfredo & Fiorelli, Cristiana, 2020. "Structural Differences In The Eurozone: Measuring Financial Stability By Fci," Macroeconomic Dynamics, Cambridge University Press, vol. 24(1), pages 69-92, January.
    • Handle: RePEc:cup:macdyn:v:24:y:2020:i:1:p:69-92_5
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S1365100518000329/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mishra, Akanksha & Dubey, Amlendu, 2022. "Inflation targeting and its spillover effects on financial stability in emerging market economies," Journal of Policy Modeling, Elsevier, vol. 44(6), pages 1198-1218.
    2. Deimantė Teresienė & Greta Keliuotytė-Staniulėnienė & Rasa Kanapickienė, 2021. "Sustainable Economic Growth Support through Credit Transmission Channel and Financial Stability: In the Context of the COVID-19 Pandemic," Sustainability, MDPI, vol. 13(5), pages 1-34, March.
    3. Adil Saleem & Judit Sági & Budi Setiawan, 2021. "Islamic Financial Depth, Financial Intermediation, and Sustainable Economic Growth: ARDL Approach," Economies, MDPI, vol. 9(2), pages 1-22, April.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:macdyn:v:24:y:2020:i:1:p:69-92_5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kirk Stebbing (email available below). General contact details of provider: https://www.cambridge.org/mdy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.