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Financial, business and trust cycles: the issues of synchronization

Author

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  • Yuriy Bilan

    (Faculty of Management, Rzeszow University of Technology, al. Powstañców Warszawy 12, 35-959, Rzeszów, Poland)

  • Maryna Brychko

    (Sumy State University, Rymskogo-Korsakova st., 2, 40007 Sumy, Ukraine)

  • Anna Buriak

    (Sumy State University, Rymskogo-Korsakova st., 2, 40007 Sumy, Ukraine)

  • Tetyana Vasilyeva

    (Sumy State University, Rymskogo-Korsakova st., 2, 40007 Sumy, Ukraine)

Abstract

Starting from 1920, the growing body of research has been focused on the role of psychological factors in cycle theories. Mainstream macroeconomic models are insufficient for exploring interaction among economic agents, financial institutions, and the real sector of economy. This paper is among the first to show the synchronization of financial and business cycles through the trust cycle but with a certain delay in terms. The paper presents the conceptualization of trust as a combination of two pillars – structure-based confidence based on objective information about system competences, regulations, and norms, and sentiment-driven actions of economic agents (feelings, emotions, and other subjective characteristics). The paper offers a theoretical descriptive model of a trust cycle that allows exploring several stages of correlation between financial fluctuations, trust changes, and large swings in business cycle.

Suggested Citation

  • Yuriy Bilan & Maryna Brychko & Anna Buriak & Tetyana Vasilyeva, 2019. "Financial, business and trust cycles: the issues of synchronization," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 37(1), pages 113-138.
    • Handle: RePEc:rfe:zbefri:v:37:y:2019:i:1:p:113-138
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    References listed on IDEAS

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    Cited by:

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    2. Anna VORONTSOVA & Tetiana VASYLIEVA. & Yuriy BILAN & Grzegorz OSTASZ & Tetyana MAYBORODA, 2020. "The Influence Of State Regulation Of Education For Achieving The Sustainable Development Goals: Case Study Of Central And Eastern European Countries," REVISTA ADMINISTRATIE SI MANAGEMENT PUBLIC, Faculty of Administration and Public Management, Academy of Economic Studies, Bucharest, Romania, vol. 2020(34), pages 6-26, June.
    3. Tetyana Vasylieva & Vladyslav Pavlyk & Yuriy Bilan & Grzegorz Mentel & Marcin Rabe, 2021. "Assessment of Energy Efficiency Gaps: The Case for Ukraine," Energies, MDPI, vol. 14(5), pages 1-14, March.
    4. Aurel Burciu & Rozalia Kicsi & Ionel Bostan, 2020. "Social Trust and Dynamics of Capitalist Economies in the Context of Clashing Managerial Factors with Risks and Severe Turbulence: A Conceptual Inquiry," Sustainability, MDPI, vol. 12(21), pages 1-28, October.

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    More about this item

    Keywords

    trust cycle; business cycle; financial cycle; economic agents’ behavior;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E71 - Macroeconomics and Monetary Economics - - Macro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on the Macro Economy
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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