BoF Online 1/2012

​The ongoing crisis has highlighted the need to understand the linkages between financial markets and the real economy. This paper uses turning point analysis to establish some stylized facts on financial cycles and business cycles. In particular, we want to find out, whether developments in financial markets lead developments in the real economy. The main focus of the analysis is on recessions: arguably financial frictions and constraints tend to bite more during economic downturns than during expansions.