Financial and economic downturns in OECD countries.

This article empirically studies the linkages between financial variable downturns and economic recessions. We present evidence that real asset prices tend to lead real cycles, while loan-to-GDP and loan-to-deposit ratios lag them. Using a probit anaylsis, we document that downturns in real asset prices, particularly real house prices, are useful leading indicators of economic recessions. [ABSTRACT FROM PUBLISHER]