Research Newsletter Online

1 • 2014

Changing the focus of research: from business cycles to growth

An interesting perspective emerges from the most recent financial crisis and subsequent Great Depression once we combine two observations, one directly related to the crisis and the other to a longer-term development that will very likely have a longer-term impact, at the level of individual countries and at the global level. For one, the flow of events from the developed world to the rest of the world has had well known adverse effects on the global economy. On balance, the related literature suggests that the longer-term level of real GDP will be adversely affected by financial crises. 
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Information flows and economic activity

Large swings in asset prices - not uncommon occurrences in the financial markets - need not be symmetric. Quite the contrary, since the duo of gradual boom followed by sudden crash is a ubiquitous feature of the financial markets, as emphasized by Veldkamp (2005)  . Explaining such price dynamics via standard full-information, rational expectations models has indeed proven to be challenging. Consequently, researchers have turned to deviations from the full rational benchmark in order to account for these apparently robust features of observed data.
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Russian interbank markets still segmented 

During the last year or so BOFIT has published several discussion papers on the Russian interbank market and its features. In ‘Structural features and interest-rate dynamics of Russia’s interbank lending market’ (BOFIT DP 23/2013), Alexey Egorov and Olga Kovalenko document how the Russian banking sector consists of some 40-50 'core' banks, which also have access to international capital markets, as well as some 900 smaller financial institutions that often concentrate on smaller niche markets.
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Ongoing research

Research activity is at a high pitch in the research unit and at BOFIT. The average number of ongoing research projects per research economist is more than five. It is hardly feasible to review all the projects. Instead, we focus here on the core research question addressed in a group of basic research projects.
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Recent Bank of Finland research publications




Head of Research
Jouko Vilmunen
Monetary Policy and Research
Research Unit

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

Head of Research
Iikka Korhonen

ISSN 1796-9131
(web publication)

Research Newsletters (PDF)



​The Research Newsletter, previously published in Finnish only, provides a preview of Bank of Finland research and occasionally also descriptions of policy analyses, as well as information about forthcoming conferences and research publications. The Newsletter also covers the activities of the Bank of Finland's Institute for Economies in Transition (BOFIT). The Newsletter is currently issued three times a year, online.