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The economic and fiscal consequences of financial crises

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  • Reinhart, Carmen

Abstract

Financial crises are historically associated with the “4 deadly D’s”: Sharp economic downturns follow banking crises; with government revenues dragged down, fiscal deficits worsen; deficits lead to debt; as debt piles up rating downgrades follow. For the most fortunate countries, the crisis does not lead to the deadliest D: default, but for many it has.

Suggested Citation

  • Reinhart, Carmen, 2009. "The economic and fiscal consequences of financial crises," MPRA Paper 13025, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:13025
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    References listed on IDEAS

    as
    1. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "The Aftermath of Financial Crises," American Economic Review, American Economic Association, vol. 99(2), pages 466-472, May.
    2. Carmen M. Reinhart & Kenneth S. Rogoff, 2014. "This Time is Different: A Panoramic View of Eight Centuries of Financial Crises," Annals of Economics and Finance, Society for AEF, vol. 15(2), pages 215-268, November.
    3. Calvo, Guillermo A. & Izquierdo, Alejandro & Loo-Kung, Rudy, 2006. "Relative price volatility under Sudden Stops: The relevance of balance sheet effects," Journal of International Economics, Elsevier, vol. 69(1), pages 231-254, June.
    4. Reinhart, Carmen, 2008. "Eight Hundred Years of Financial Folly," MPRA Paper 11864, University Library of Munich, Germany.
    5. Carmen M. Reinhart, 2002. "An Introduction," The World Bank Economic Review, World Bank Group, vol. 16(2), pages 149-150, August.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    financial crises; unemployment; debt; deficit; housing prices;
    All these keywords.

    JEL classification:

    • F0 - International Economics - - General
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

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