Financial Crises and Economic Activity

Stephen Cecchetti, Marion Kohler and ,
Authors registered in the RePEc Author Service: Christian Upper

No 7495, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We study the output costs of 40 systemic banking crises since 1980. Most, but not all, crises in our sample coincide with a sharp contraction in output from which it took several years to recover. Our main findings are as follows. First, the current financial crisis is unlike any others in terms of a wide range of economic factors. Second, the output losses of past banking crises were higher when they were accompanied by a currency crisis or when growth was low at the onset of the crisis. When accompanied by a sovereign debt default, a systemic banking crisis was less costly. And, third, there is a tendency for systemic banking crises to have lasting negative output effects.

Keywords: Systemic banking crisis; Cost of crisis; Output loss; Recovery; Crises (search for similar items in EconPapers)
JEL-codes: E32 E44 G01 (search for similar items in EconPapers)
Date: 2009-11
New Economics Papers: this item is included in nep-fdg, nep-his and nep-mac
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Citations: View citations in EconPapers (112)

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Related works:
Journal Article: Financial crises and economic activity (2009)
Working Paper: Financial Crises and Economic Activity (2009)
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