The Disparate Outcomes of Bank‑ and Nonbank‑Financed Private Credit Expansions

Nina Boyarchenko and Leonardo Elias

No 20240820, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: Long-run trends in increased access to credit are thought to improve real activity. However, “rapid” credit expansions do not always end well and have been shown in the academic literature to predict adverse real outcomes such as lower GDP growth and an increased likelihood of crises. Given these financial stability considerations associated with rapid credit expansions, being able to distinguish in real time “good booms” from “bad booms” is of crucial interest for policymakers. While the recent literature has focused on understanding how the composition of borrowers helps distinguish good and bad booms, in this post we investigate how the composition of lending during a credit expansion matters for subsequent real outcomes.

Keywords: intermediated credit; credit expansion; predictable financial crises (search for similar items in EconPapers)
JEL-codes: E32 G21 G23 G32 (search for similar items in EconPapers)
Date: 2024-08-20
New Economics Papers: this item is included in nep-fdg
References: Add references at CitEc
Citations:

Downloads: (external link)
https://libertystreeteconomics.newyorkfed.org/2024 ... e-credit-expansions/ Full text (text/html)

Related works:
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:fip:fednls:98695

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Liberty Street Economics from Federal Reserve Bank of New York Contact information at EDIRC.
Bibliographic data for series maintained by Gabriella Bucciarelli ().