Asset Prices, Investment, Credit and Financial Vulnerability. An Analysis Using Quarterly Figures

Abstract

Previous analyses using annual figures for a period of over 150 years show that gap indicators of house prices, equity prices, investment and credit are useful in predicting periods of financial instability in Norway. Calculating these gap indicators using quarterly figures back to the 1970s suggest that the indicators generally follow the same profile, but the variability of the indicators increases somewhat. Gap indicators of asset prices, investment and credit calculated using quarterly figures can thus provide signals of the build-up of risk in the financial system, although the period under analysis is shorter than earlier studies.