How global risk perceptions affect economic growth

Jon Danielsson, Marcela Valenzuela, Ilknur Zer 

The relationship between financial risk and economic growth is complex. This column finds that perceptions of high risk unambiguously harm growth, while perceived low risk has an initial positive impact, which eventually turns negative. Global risk has a stronger effect on growth than local risk, via its impact on capital flows, investment, and debt-issuer quality, challenging monetary policy independence.

Πηγή: Voxeu

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