Real-time forward-looking skewness over the business cycle

B-Tier
Journal: Review of Economic Dynamics
Year: 2024
Volume: 54

Score contribution per author:

2.018 = (α=2.02 / 1 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This paper measures option-implied skewness for individual firms and the S&P 500 index between 1980 and 2021, giving real-time measures of conditional micro and macro skewness. There are three key results: 1. Micro skewness is significantly procyclical, while macro skewness is acyclical; 2. Micro skewness leads the business cycle and is strongly linked to credit spreads, suggesting one potential causal channel; 3. Micro skewness is significantly, and not mechanically, correlated with macro volatility, implying that there is a common shock driving them both, which is also linked to the business cycle. (Copyright: Elsevier)

Technical Details

RePEc Handle
repec:red:issued:24-39
Journal Field
Macro
Author Count
1
Added to Database
2026-01-25