CNB Research Seminar "The Global Credit Cycle and Local Economic Activity

Prague, 17 December 2025

Nina Boyarchenko (Federal Reserve Bank of New York)

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Nina Boyarchenko is a financial research advisor in Capital Markets and a member of the Research Group’s Workforce and Recruiting Committee. Her research interests are in Macro Asset Pricing and Financial Economics. Her work on the “growth-at-risk framework” was the recipient of Central Banking’s 2025 Economics in Central Banking award. She holds a joint PhD in Finance and Economics from the University of Chicago, Booth School of Business and Department of Economics, as well as a B.S. in Applied Mathematics from University of Texas at Austin.

The Global Credit Cycle and Local Economic Activity (abstract)

Do global credit conditions affect local credit and business cycles? Using the Global Credit Cycle factor constructed in Boyarchenko and Elias (2024), we uncover a global cycle in real activity and downside risk to real activity. We document that global credit conditions predict the mean and left tail of real activity growth outcomes at the country level. Looser global credit conditions predict increased risk taking, both by global investors, leading to an increased supply of credit locally, and by local firms, leading to an increased demand for credit. When global credit conditions tighten, capital flows out of risky securities and risky countries, and elevated levels of local firm leverage dampen economic activity. Thus, the global pricing of corporate credit is a fundamental factor in driving local credit conditions and real outcomes.