Financial and Business Cycles: Shall We Dance?: An Application to Kazakhstan
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Summary:
This paper examines the role of financial cycle proxies in refining available estimates of the business cycle in Kazakhstan. It contributes to the existing literature by introducing a formal test for the stability of the mean of exogenous variables in the estimation set up, and by developing a self-contained statistical package to streamline the whole estimation process. The empirical strategy is designed to be parsimonious, aiming to avoid the pitfalls associated with overly complex models while achieving comparable results. Results have implications for the extent with which the authorities should manage the business and financial cycles, with which policies, for macroprudential policy calibration, and for the usefulness for policymaking of endsample estimates of the cycle.
Series:
Working Paper No. 2024/182
Subject:
Business cycles Credit Economic growth Financial cycles Financial sector policy and analysis Money
Frequency:
regular
English
Publication Date:
August 23, 2024
ISBN/ISSN:
9798400288883/1018-5941
Stock No:
WPIEA2024182
Format:
Paper
Pages:
36
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