An Anatomy of Credit Booms: Evidence From Macro Aggregates and Micro Data

Marco Terrones and Enrique Mendoza

No 2008/226, IMF Working Papers from International Monetary Fund

Abstract: We study the characteristics of credit booms in emerging and industrial economies. Macro data show a systematic relationship between credit booms and economic expansions, rising asset prices, real appreciations and widening external deficits. Micro data show a strong association between credit booms and leverage ratios, firm values, and banking fragility. We also find that credit booms are larger in emerging economies, particularly in the nontradables sector; most emerging markets crises are associated with credit booms; and credit booms in emerging economies are often preceded by large capital inflows but not by financial reforms or productivity gains.

Keywords: WP; credit boom; business cycle; credit transmission channel; credit-GDP ratio; credit boom event; credit booms in Chile; credit expansion; credit issuance; credit transmission mechanisms; current account; dynamics of macro; private sector (search for similar items in EconPapers)
Pages: 50
Date: 2008-09-01
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Citations: View citations in EconPapers (598)

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Related works:
Working Paper: An anatomy of credit booms: evidence from macro aggregates and micro data (2008)
Working Paper: An Anatomy Of Credit Booms: Evidence From Macro Aggregates And Micro Data (2008)
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