An Anatomy of Credit Booms: Evidence from Macro Aggregates and Micro Data
59 Pages Posted: 2 Jun 2008 Last revised: 21 Nov 2022
There are 4 versions of this paper
An Anatomy of Credit Booms: Evidence from Macro Aggregates and Micro Data
An Anatomy of Credit Booms: Evidence from Macro Aggregates and Micro Data
An Anatomy of Credit Booms: Evidence from Macro Aggregates and Micro Data
Date Written: May 2008
Abstract
This paper proposes a methodology for measuring credit booms and uses it to identify credit booms in emerging and industrial economies over the past four decades. In addition, we use event study methods to identify the key empirical regularities of credit booms in macroeconomic aggregates and micro-level data. Macro data show a systematic relationship between credit booms and economic expansions, rising asset prices, real appreciations, widening external deficits and managed exchange rates. Micro data show a strong association between credit booms and firm-level measures of leverage, firm values, and external financing, and bank-level indicators of banking fragility. Credit booms in industrial and emerging economies show three major differences: (1) credit booms and the macro and micro fluctuations associated with them are larger in emerging economies, particularly in the nontradables sector; (2) not all credit booms end in financial crises, but most emerging markets crises were associated with credit booms; and (3) credit booms in emerging economies are often preceded by large capital inflows but not by financial reforms or productivity gains.
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
An Anatomy of Credit Booms: Evidence from Macro Aggregates and Micro Data
-
An Anatomy of Credit Booms: Evidence from Macro Aggregates and Micro Data
-
The Institutional Memory Hypothesis and the Procyclicality of Bank Lending Behavior
By Allen N. Berger and Gregory F. Udell
-
Listening to Loan Officers: The Impact of Commercial Credit Standards on Lending and Output
By Cara S. Lown, Donald P. Morgan, ...
-
Capital Flow Bonanzas: An Encompassing View of the Past and Present
-
Capital Flow Bonanzas: An Encompassing View of the Past and Present
-
By S. Brock Blomberg and Patrick K. Asea
-
By Gary B. Gorton and Ping He
-
By Gary B. Gorton and Ping He
-
Survey Evidence of Tighter Credit Conditions: What Does It Mean?
By Raymond E. Owens and Stacey Schreft