Understanding the Links Between Financial Crises and the Rest of the Economy
When Nightmares Become Real: Modelling Linkages between the Financial Sector and the Real Economy in the Aftermath of the Financial Crisis
By C.D. Howe Institute —— Bio and Archives--August 16, 2011
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TORONTO, Aug. 16, 2011 - Our understanding of the links between the financial sector and the rest of the economy needs to improve, concludes a new report from the C.D. Howe Institute. In When Nightmares Become Real: Modelling Linkages between the Financial Sector and the Real Economy in the Aftermath of the Financial Crisis, authors Philippe Bergevin, Pierre Duguay and Paul Jenkins say that the complexity of these linkages have been neglected in the models typically used to guide monetary policy - the question is how to remedy deficiencies in policymakers’ economic models of the world, so that they can be used with confidence in guiding policy.
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