Financial booms appear to spill over to the real economy less than financial busts, with implications for policy-makers looking to maintain stability, according to a working paper published on February 21 by Sveriges Riksbank.

Kristina Bluwstein of the European University Institute first uses an empirical model to show financial shocks tend to affect the economy more during busts. Then, to study the relationship further, she turns to a structural model, which is able to replicate the asymmetry