Journal Article

Implications of Bank Equity Price Declines for Inflation

Abstract: This Economic Commentary examines the relationship between bank equity price index returns and inflation in advanced economies. While large declines in bank equity price indices are generally followed by declines in the ratio of bank credit to GDP, a measure of credit supply, and economic activity as measured by GDP, they have essentially no effect on inflation. These findings suggest that the collapse of several regional banks in early 2023 would not, on its own, put downward pressure on inflation.

Keywords: inflation;

https://doi.org/10.26509/frbc-ec-202318

Bibliographic Information

Provider: Federal Reserve Bank of Cleveland

Part of Series: Economic Commentary

Publication Date: 2023-11-17

Volume: 2023

Issue: 18

Pages: 6