Overleveraging, financial fragility and the banking-macro link : theory and empirical evidence \n
Why this work is in the frame
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Bibliographic record
Abstract
We investigate consequences of overleveraging and financial-sector stress on real \neconomic activities. When banks become vulnerable, due to high leveraging, and \nthere is a strong feedback between the real and the financial sector, a regime of high \nfinancial stress may arise. The vulnerability of the banking system in a high lever- \nage and a high-stress regime can, through macro feedback effects, result in unstable \ndynamics. To assess this question empirically, we employ a nonlinear, multi-regime \nvector autoregression approach (MRVAR), to explore the consequences of instabili- \nties arising from regime dependent shocks. We analyze data on industrial production \nand the IMF Financial Stress Index. In order to assess how output is affected by \nthe individual risk drivers making up the IMF index, we study eight economies - \nthe U.S., Canada, Japan and the UK, and for the four largest euro-zone economies, \nnamely, Germany, France, Italy, and Spain, using Granger-causality and nonlinear \nimpulse-response analysis. Our results strongly suggest that financial-sector stress, \nexerts a strong, nonlinear influence on economic activity, but that individual risk \ndrivers affect economic activity rather differently across stress regimes and across \ncountries.
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Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.001 | 0.000 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.000 | 0.000 |
| Science and technology studies | 0.000 | 0.001 |
| Scholarly communication | 0.000 | 0.000 |
| Open science | 0.000 | 0.000 |
| Research integrity | 0.000 | 0.000 |
| Insufficient payload (model declined to judge) | 0.018 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from it