Stories of the Twentieth Century for the Twenty-First

Maurice Obstfeld and Pierre-Olivier Gourinchas

No 8518, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: A key precursor of twentieth-century financial crises in emerging and advanced economies alike was the rapid buildup of leverage. Those emerging economies that avoided leverage booms during the 2000s also were most likely to avoid the worst effects of the twenty-first century?s first global crisis. A discrete-choice panel analysis using 1973-2010 data suggests that domestic credit expansion and real currency appreciation have been the most robust and significant predictors of financial crises, regardless of whether a country is emerging or advanced. For emerging economies, however, higher foreign exchange reserves predict a sharply reduced probability of a subsequent crisis.

Keywords: Banking crisis; Credit boom; Currency crisis; Emerging markets; Leverage; Sovereign default (search for similar items in EconPapers)
JEL-codes: E44 F32 F34 G15 G21 N10 (search for similar items in EconPapers)
Date: 2011-08
New Economics Papers: this item is included in nep-ban, nep-cba, nep-his, nep-mac and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (27)

Downloads: (external link)
https://cepr.org/publications/DP8518 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Stories of the Twentieth Century for the Twenty-First (2012)
Working Paper: Stories of the Twentieth Century for the Twenty-First (2011)
Working Paper: Stories of the Twentieth Century for the Twenty-First (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:8518

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP8518

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().