Open AccessLending Sociodynamics and Drivers of the Financial Business Cycle
Author(s) -
Raymond J. Hawkins,
Hengyu Kuang
Publication year - 2017
Publication title -
quantitative finance and economics
Language(s) - English
Resource type - Journals
ISSN - 2573-0134
DOI - 10.3934/qfe.2017.3.219
Subject(s) - business cycle , estimation , central bank , business , business model , finance , economics , financial system , monetary economics , monetary policy , macroeconomics , marketing , management
We extend sociodynamic modeling of the financial business cycle to the Euro Area and Japan. Using an opinion-formation model and machine learning techniques we find stable model estimation of the financial business cycle using central bank lending surveys and a few selected macroeconomic variables. We find that banks have asymmetric response to good and bad economic information, and that banks adapt to their peers' opinions when changing lending policies