Research Newsletter Online 3/2010

3 • 2010

Editorial: Financial crises and economic growth

A lot has been written about banking crises or, more generally, about financial crises incorporating, in particular, different and often widely debated views of their possible causes and of the magnitude of economic disruptions that accompany these extreme events. There is an emerging consensus among theoretical macroeconomists, applied economists using macroeconomic models and tools and policymakers that we need to extend our toolbox of macroeconomic models to incorporate financial imperfections into our models of business cycle fluctuations. Not only would this enable us to better understand the macroeconomic effects financial frictions at the business cycle frequency, but also to better capture those features of the interaction between financial market behaviour and the macroeconomy that have the potential to explain the emergence of financial instabilities, crises and macroeconomic disruptions.
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Challenges of the global crisis to macroeconomic theory and international finance

The Bank of Finland and Banca d'Italia jointly organized a conference honouring Pentti Kouri's scientific contributions to economics. The conference, held at the always exciting hotel Kalastajatorppa on June 11, focused on the three focal areas of Pentti Kouri ‘s research efforts: Macroeconomics and the Great Depression; Exchange Rates and Global Adjustment; and Financial Stability and Growth. In addition to professor and Nobel prize winner Edmund Phelps, a number of other distinguished international guests participated in the conference as speakers, commentators, and naturally as former fellow students, colleagues and co-authors.
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Russian banking sector displays both similarities and differences

The global economic crisis also hit hard the Russian economy. Russian GDP dropped by 7.9% last year. Unlike in many other countries, the Russian banking sector has weathered the contraction of economic activity fairly well. Although lending increased rapidly in the latter part of the last decade, the stock of bank credit did not reach a particularly high level. In Russia, too, the authorities have been willing to safeguard the banking sector’s liquidity in a variety of ways.
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Conferences and seminars Recent Bank of Finland research publications Forthcoming discussion papers

Editor
Head of Research
Jouko Vilmunen
Monetary Policy and Research
Research Unit
research@bof.fi

Bank of Finland
PO Box 160
FI-00101 Helsinki
Phone +385 10 8311

Head of Research
BOFIT
Iikka Korhonen

ISSN 1796-9131 (web publication)

Research Newsletter 3/2010 (PDF)