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Systemic Crisis and Growth Revisited: Has the Global Financial Crisis Marked a New Era?

Author

Listed:
  • Sven Steinkamp

    () (Institute of Empirical Economic Research, Osnabrueck University, D-49069 Osnabrueck, Germany)

  • Frank Westermann

    () (Institute of Empirical Economic Research, Osnabrueck University, D-49069 Osnabrueck, Germany)

Abstract

Occasional crises have been shown to be part of growth enhancing mechanism (see Rancière, Tornell and Westermann, 2008). In this paper, we document that neither the stereotypical case study of India vs. Thailand, nor the benchmark growth-regression in this earlier research support this result anymore when updating the sample by one decade that includes the Global Financial Crisis, 2007/8. We analyze the time-varying nature of this relationship in rolling regressions and an historical dataset. In the subset of countries with enforceability problems, we find that the link between occasional crisis, measured by the negative skewness of credit growth, and per-capita output growth still remains intact.

Suggested Citation

  • Sven Steinkamp & Frank Westermann, 2018. "Systemic Crisis and Growth Revisited: Has the Global Financial Crisis Marked a New Era?," Working Papers 112, Institute of Empirical Economic Research, Osnabrueck University.
  • Handle: RePEc:iee:wpaper:wp112
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    More about this item

    Keywords

    Long-Term Growth; Systemic Crisis; Financial Liberalization;

    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • G01 - Financial Economics - - General - - - Financial Crises

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