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The Great Leveraging


  • Alan M. Taylor


What can history tell us about the relationship between the banking system, financial crises, the global economy, and economic performance? Evidence shows that in the advanced economies we live in a world that is more financialized than ever before as measured by importance of credit in the economy. I term this long---run evolution "The Great Leveraging" and present a ten‐point examination of its main contours and implications.

Suggested Citation

  • Alan M. Taylor, 2012. "The Great Leveraging," NBER Working Papers 18290, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:18290
    Note: DAE IFM ME

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    Cited by:

    1. De Bock, Reinout & de Carvalho Filho, Irineu, 2015. "The behavior of currencies during risk-off episodes," Journal of International Money and Finance, Elsevier, vol. 53(C), pages 218-234.
    2. Fabio C. Bagliano & Claudio Morana, 2017. "It ain’t over till it’s over: A global perspective on the Great Moderation-Great Recession interconnection," Applied Economics, Taylor & Francis Journals, vol. 49(49), pages 4946-4969, October.
    3. Dominik Bernhofer & Octavio Fernández-Amador & Martin Gächter & Friedrich Sindermann, 2014. "Finance, Potential Output and the Business Cycle: Empirical Evidence from Selected Advanced and CESEE Economies," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 2, pages 52-75.
    4. Didier Sornette & Peter Cauwels, 2014. "1980–2008: The Illusion of the Perpetual Money Machine and What It Bodes for the Future," Risks, MDPI, Open Access Journal, vol. 2(2), pages 1-29, April.
    5. Colvin, Christopher L. & de Jong, Abe & Fliers, Philip T., 2015. "Predicting the past: Understanding the causes of bank distress in the Netherlands in the 1920s," Explorations in Economic History, Elsevier, vol. 55(C), pages 97-121.
    6. Bremus, Franziska & Buch, Claudia M., 2017. "Granularity in banking and growth: Does financial openness matter?," Journal of Banking & Finance, Elsevier, vol. 77(C), pages 300-316.
    7. M. Albert & C. Jude & C. Rebillard, 2015. "The Long Landing Scenario: Rebalancing from Overinvestment and Excessive Credit Growth. Implications for Potential Growth in China," Working papers 572, Banque de France.
    8. Piotr Cizkowicz & Andrzej Rzonca & Andrzej Toroj, 2015. "In search for appropriate lower bound.Zero lower bound vs. positive lower bound under discretion and commitment," NBP Working Papers 215, Narodowy Bank Polski, Economic Research Department.
    9. Christopher M. Meissner, 2013. "Capital Flows, Credit Booms, and Financial Crises in the Classical Gold Standard Era," NBER Working Papers 18814, National Bureau of Economic Research, Inc.
    10. Afanasyeva, Elena, 2012. "Atypical Behavior of Money and Credit: Evidence From Conditional Forecasts," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 65405, Verein für Socialpolitik / German Economic Association.
    11. Niels Gilbert & Jeroen Hessel & Silvie Verkaart, 2013. "Towards a Stable Monetary Union: What Role for Eurobonds?," DNB Working Papers 379, Netherlands Central Bank, Research Department.
    12. Domonkos Tomáš & Ostrihoň Filip & Šikulová Ivana & Širaňová Mária, 2017. "Analysing the Relevance of the MIP Scoreboard's Indicators," National Institute Economic Review, National Institute of Economic and Social Research, vol. 239(1), pages 32-52, February.

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    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • N1 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations
    • N2 - Economic History - - Financial Markets and Institutions

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