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Larger crises cost more: impact of banking sector instability on output growth Author info | Abstract | Publisher info | Download info | Related research | Statistics Dobromil Serwa () (Warsaw School of Economics, National Bank of Poland)
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We propose a method for calculating the macroeconomic costs of banking crises that controls for the downward impact of recessions on banking activity. In contrast to earlier research, we estimate the cost of crises based on the size of banking crises. The extent of a crisis is measured using banking sector aggregates. The results, based on our method and data from over 100 banking crises, suggest that the size of a crisis matters for economic growth. Lower credit, deposit and money growth during crises cause GDP growth to decline.
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Paper provided by Department of Applied Econometrics, Warsaw School of Economics in its series Working Papers with number
25.
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Length: 38 pages
Date of creation: 25 Mar 2008Date of revision:
Handle: RePEc:wse:wpaper:25Contact details of provider: Postal: 02-554 Warszawa, Al. Niepodległosci 164 Web page: http://www.sgh.waw.pl/instytuty/zes More information through EDIRC
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Keywords: banking crises ; costs ; output growth ; event-study ; Other versions of this item:
Find related papers by JEL classification: C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Mortgages G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
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