The past recession highlighted the financial sector's role in the economy, specifically that its health can affect economic fluctuations. It is not as easy to see how well this sector is doing now, as there are many, many indicators.
We identify financial stress regimes using a model that explicitly links financial variables with the macroeconomy.
The recent financial crisis helped emphasize the need for measures of financial conditions. In the wake of the crisis...
Although the STLFSI suggests the level of financial stress in the markets has declined significantly since September 2008, the stress level remains modestly higher than average.
The STLFSI measures the degree of financial stress in the markets and is constructed from 18 weekly data series: seven interest rate series, six yield spreads and five other indicators.