The financial accelerator in macroeconomics is the idea that adverse shocks to the economy may be amplified by worsening financial market conditions. More broadly, adverse conditions in the real economy and in financial markets propagate the financial and macroeconomic downturn.
Read more about Financial Accelerator: Financial Accelerator Mechanism, History of Acceleration in Macroeconomics, A Simple Theoretical Framework, Welfare Losses and Government Intervention : An Example From The Subprime Mortgage Crisis, Financial Accelerator in Open Economies
Famous quotes containing the word financial:
“One of the reforms to be carried out during the incoming administration is a change in our monetary and banking laws, so as to secure greater elasticity in the forms of currency available for trade and to prevent the limitations of law from operating to increase the embarrassment of a financial panic.”
—William Howard Taft (1857–1930)