Financial Crises, Regulation and Growth

Ray Barrell, Ian Hurst and Simon Kirby
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Ian Hurst: National Institute of Economic and Social Research

National Institute Economic Review, 2008, vol. 206, issue 1, 56-65

Abstract: The paper discusses the effects on growth of a systemic banking crisis as a result of debt defaults. These effects will come from the impact of credit rationing on consumption and credit and from the impacts of a significant rise in the spread between lending and borrowing rates for both producers and consumers. The analysis uses the dynamic stochastic general equilibrium version of the National Institute global model. The paper also investigates the impact on output of a permanent, regulation induced, rise in margins in the financial sector, taking into account the impacts of regulation on equity market valuations.

Keywords: Financial crises: financial market spreads; forward looking consumers; dynamic stochastic general equilibrium models JEL Classifications: E17; E44 (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (2)

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Journal Article: Financial Crises, Regulation and Growth (2008)
Working Paper: Financial crises, regulation and growth (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:sae:niesru:v:206:y:2008:i:1:p:56-65

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