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Banking Crises and Boom-Bust Dynamics: Evidence for Italy (1861-2016)

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  • Silvana Bartoletto
  • Bruno Chiarini
  • Elisabetta Marzano
  • Paolo Piselli

Abstract

The financial crises of 2007-2008 and the subsequent worldwide recession show the importance of exploring the correlation between financial and real crises. Starting from our new estimation of the Italian business cycle (Bartoletto et al., 2017), we analyze the linkage between banking crises and the business cycle in Italy over the last two centuries. The vast literature on banking crises in Italy is dominated by the narrative approach. In this work we aim to advance the argument one step further by integrating the narrative approach with an empirical VAR analysis, distinguishing between slowdown and inner-banking crises according to the business cycle phase in which they occur. Our long-run analysis proves that not all the banking crises have a connection with real activity and that not all the crises occurring close to a GDP contraction were associated to a boom-bust mechanism.

Suggested Citation

  • Silvana Bartoletto & Bruno Chiarini & Elisabetta Marzano & Paolo Piselli, 2018. "Banking Crises and Boom-Bust Dynamics: Evidence for Italy (1861-2016)," CESifo Working Paper Series 6972, CESifo.
    • Handle: RePEc:ces:ceswps:_6972
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    Cited by:

    1. Bartoletto, Silvana & Chiarini, Bruno & Marzano, Elisabetta & Piselli, Paolo, 2019. "Business cycles, credit cycles, and asymmetric effects of credit fluctuations: Evidence from Italy for the period of 1861–2013," Journal of Macroeconomics, Elsevier, vol. 61(C), pages 1-1.
    2. Silvana Bartoletto & Bruno Chiarini & Elisabetta Marzano & Paolo Piselli, 2015. "Business Cycles, Credit Cycles and Bank Holdings of Sovereign Bonds: Historical Evidence for Italy 1861-2013," CESifo Working Paper Series 5318, CESifo.

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    More about this item

    Keywords

    business fluctuations; financial cycle; bank credit; banking crisis; VAR;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-

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