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Modeling Financial Sector Linkages to the Macroeconomy
Presentations Thursday, September 13, 2012 What Do We Learn From Credit Market Evidence? Because financial markets are forward-looking, asset prices embed expectations about future macroeconomic outcomes. However, extracting these expectations is complicated by the existence of time-varying risk premia. Credit spreads are indicative because they reflect disruptions in credit supply, either through the worsening of […]