Financial conditions are supporting the upswing

Analysis - September 2018 - No. 14

Authors Jensen, Jakob Roager; Pedersen, Jesper
Subject Danish Economy; Current economic and monetary trends; Models; Economic activity and employment
Type Analysis
Year 2018
Published 12 September 2018
Housing and equity prices have increased significantly in recent years, while interest rates are exceptionally low. Based on a structural vector autoregressive model, these factors, combined with credit growth, are overall estimated to have contributed 0.3-0.5 percentage points per year to year-on-year GDP growth since 2016. In recent years, the contribution has been at its highest level since prior to the financial crisis in 2008. Financial conditions are expected to continue to stimulate economic growth during the 2018-20 forecast period.