Skewed Credit and Growth Dynamics after the Global Financial Crisis
Gemma Estrada (),
Aitor Erce (),
Donghyun Park () and
Juan Rojas ()
Working Papers from eSocialSciences
A large empirical literature finds that financial development is beneficial for economic growth, although some recent evidence suggests otherwise. The paper contributes to the financeâ€“growth literature by examining the role of credit growth skewness and long-run growth. Earlier literature found that credit growth skewness is negatively associated with economic growth. It revisits this relationship using a large and recent panel dataset that encompasses Organisation for Economic Co-operation and Development economies and the impact of the global financial crisis. While the results reconfirm an association between credit skewness and growth, the relationship is more nuanced than previously thought. It finds that the beneficial effects from lower skewnessâ€”systemic financial risksâ€”were evident only prior to 2000. The findings help explain why boomâ€“bust dynamics were positively associated with economic growth in emerging markets in the past and why the growth of advanced economies has been sluggish since the global financial crisis.
Keywords: eSS; credit dynamics; economic growth; skewness; economic growth; financeâ€“growth literature; credit growth skewness; Organisation for Economic Co-operation and Development economies; global financial crisis; systemic financial risks. (search for similar items in EconPapers)
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Working Paper: Skewed Credit and Growth Dynamics after the Global Financial Crisis (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:ess:wpaper:id:12939
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