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Indicators of Financial Instability

Author

Listed:
  • Monadjemi , Mehdi

    (School of Economics, University of New South Wales)

  • Lodewijks , John

    (School of Economics, University of New South Wales)

Abstract

A global Slowdown, rising oil prices, and monetary tightening in industrial countries may lead to net capital outflows which accentuate high ratios of short-term to total external debt. This paper focuses on finding consistent indicators of financial instability. Knowledge of these indicators should assist attempts to implement institutional financial reform and improve an economy's resilience to shocks. It is highly useful to provide policy-makers with tools that measure financial crises, and in particular, to examine how macroeconomic aggregates behave during episodes of financial instability cycles. This is the objective of what follows and these indicators signal the variables that need to be monitored for effective policy responses to emerging financial difficulties.

Suggested Citation

  • Monadjemi , Mehdi & Lodewijks , John, 2009. "Indicators of Financial Instability," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 5(2), pages 33-46, April.
    • Handle: RePEc:mbr:jmonec:v:5:y:2009:i:2:p:33-46
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    References listed on IDEAS

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    More about this item

    Keywords

    Financial Instability; Financial Crises;

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets

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