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Creditless Recoveries

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  • International Monetary Fund

Abstract

Recoveries that occur in the absence of credit growth are often dubbed miracles and named after mythical creatures. Yet these are not rare animals, and are not always miracles. About one out of five recoveries is "creditless", and average growth during these episodes is about a third lower than during "normal" recoveries. Aggregate and sectoral data suggest that impaired financial intermediation is the culprit. Creditless recoveries are more common after banking crises and credit booms. Furthermore, sectors more dependent on external finance grow relatively less and more financially dependent activities (such as investment) are curtailed more during creditless recoveries.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 11/58.

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Length: 30
Date of creation: 01 Mar 2011
Date of revision:
Handle: RePEc:imf:imfwpa:11/58

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Keywords: Banking crisis; Bank credit; Credit expansion; Developed countries; Economic growth; Economic recovery; Emerging markets; Industrial investment; banking; banking crises; recessions; recession; credit boom; credit booms; debt crisis; currency crisis; systemic banking crisis; financial crises; working capital; pre-crisis; sovereign debt crisis; currency crises; denominated loans; debt restructuring; banks ? balance sheets; debt overhang; banking systems; retained earnings; financial reforms; systemic banking crises; asian crisis; global financial crisis; financial crisis;

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References

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Citations

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Cited by:
  1. Jens Weidmann, 2012. "Managing macroprudential and monetary policy - a challenge for central banks," Chapters in SUERF Studies, SUERF - The European Money and Finance Forum.
  2. Jürgen Stark, 2012. "Macro-prudential supervision and financial integration - the ESRB at 1," Chapters in SUERF Studies, SUERF - The European Money and Finance Forum.
  3. Òscar Jordà & Moritz HP. Schularick & Alan M. Taylor, 2011. "When Credit Bites Back: Leverage, Business Cycles, and Crises," NBER Working Papers 17621, National Bureau of Economic Research, Inc.
  4. Hermann Remsperger, 2012. "Opening Remarks," Chapters in SUERF Studies, SUERF - The European Money and Finance Forum.
  5. Hermann Remsperger & Stephen G. Cecchetti & Stefan Ingves & Alberto Giovannini & Jens Weidmann & Alexandros Vardoulakis & Stefano Neri & Jürgen Stark & Elod Takáts & Christian Upper & Claudia M. Buc, 2012. "The ESRB at 1," SUERF Studies, SUERF - The European Money and Finance Forum, number 2012/4 edited by Stefan Gerlach & Ernest Gnan & Jens Ulbrich.
  6. Ernest Gnan & Stefan Gerlach & Jens Ulbrich, 2012. "The ESRB at 1 - An Introduction," Chapters in SUERF Studies, SUERF - The European Money and Finance Forum.
  7. Stefano Neri, 2012. "Financial intermediation and the real economy:implications for monetary and macroprudential policies," Chapters in SUERF Studies, SUERF - The European Money and Finance Forum.
  8. Stephen G. Cecchetti, 2012. "Measuring Systemic Risk," Chapters in SUERF Studies, SUERF - The European Money and Finance Forum.
  9. Alexandros Vardoulakis, 2012. "Financial regulation in general equilibrium," Chapters in SUERF Studies, SUERF - The European Money and Finance Forum.
  10. Fábián, Gergely & Fáykiss, Péter & Szigel, Gábor, 2012. "Toolkit for stimulating corporate lending," MPRA Paper 40336, University Library of Munich, Germany.
  11. Alberto Giovannini, 2012. "Is there progress in financial reform?," Chapters in SUERF Studies, SUERF - The European Money and Finance Forum.
  12. Forte, Antonio, 2012. "Italy after the crisis: a case of recoveryless credit growth," MPRA Paper 35775, University Library of Munich, Germany.
  13. Stefan Ingves, 2012. "Experiences with the ESRB - the view from within and relation to other policy areas," Chapters in SUERF Studies, SUERF - The European Money and Finance Forum.

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