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The effect on the Swedish real economy of the financial crisis

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  • Par Osterholm

Abstract

This article investigates the effects of the financial crisis on the Swedish real economy. In order to do this, an index which describes the financial conditions of the Swedish economy is developed. The index indicates that domestic Swedish financial conditions have deteriorated substantially during 2008 and are now at the highest level since the crisis of the early 1990s. A Bayesian Vector Autoregression (BVAR) model with both US and Swedish variables is used to assess the quantitative effects of the financial crisis on Swedish real Gross Domestic Product (GDP) growth. Results suggest that the growth of the Swedish economy will be substantially slower in the next couple of years due to the financial crisis.

Suggested Citation

  • Par Osterholm, 2010. "The effect on the Swedish real economy of the financial crisis," Applied Financial Economics, Taylor & Francis Journals, vol. 20(4), pages 265-274.
    • Handle: RePEc:taf:apfiec:v:20:y:2010:i:4:p:265-274
    DOI: 10.1080/09603100903357408
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    10. Meredith Beechey & Pär Österholm, 2008. "A Bayesian Vector Autoregressive Model with Informative Steady‐state Priors for the Australian Economy," The Economic Record, The Economic Society of Australia, vol. 84(267), pages 449-465, December.
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    Cited by:

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    2. Hakan Kara & Pinar Ozlu & Deren Unalmis, 2015. "Turkiye icin Finansal Kosullar Endeksi," Central Bank Review, Research and Monetary Policy Department, Central Bank of the Republic of Turkey, vol. 15(3), pages 41-73.
    3. Gustafsson, Peter & Stockhammar, Pär & Österholm, Pär, 2016. "Macroeconomic effects of a decline in housing prices in Sweden," Journal of Policy Modeling, Elsevier, vol. 38(2), pages 242-255.

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    More about this item

    JEL classification:

    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

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