Inequality, credit and financial crises

Credit and growth after financial crises

We find that declining bank credit to the private sector will not necessarily constrain the economic recovery after output has bottomed out following a financial crisis. To obtain this result, we examine data from 39 financial crises, which – as the current one – were preceded by credit booms. In these crises the change in bank credit, either in real terms or relative to GDP, consistently did n...

Credit booms, financial fragility and banking crises

Using a new country-level panel database, we explore effect of capital inflow surges, credit booms and financial fragility on the probability of banking crises. We find that booms increase the probability of a crisis only in relatively fragile financial systems. © 2015 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY license (http://creativecommons.org/lice...

Inequality and Financial Crises : Some Early Findings

We employ the UTIP data set on the evolution of earnings inequality in manufacturing in the global economy to illuminate two questions. First, do regional patterns of similarity in the movement of large macroeconomic aggregates, such as real GDP, imply underlying similarities of industrial structure, so that knowledge of one national economy in a GDP cluster can reasonably be assumed to convey ...

Trade Credit versus Bank Credit during Financial Crises

Credit Spreads and the Severity of Financial Crises

We study the behavior of credit spreads and their link to economic growth during financial crises. Our main finding is that the recessions that surround financial crises are longer and deeper than the recessions surrounding non-financial crises. The slow recovery from the 2008 crisis is in keeping with historical experience of recoveries from financial crises. We reach this conclusion by examin...