Credit Booms in Commodity Exporters
No 2018-008, Working Papers from Banco Central de Reserva del Perú
This paper identifies 101 credit boom episodes, i.e. periods of exceptional credit growth, in a sample of 115 countries for 1960-2014, and compares the results for commodity exporters and non-commodity exporters. I find that there is no difference in the number and duration of credit booms between commodity exporters and non-commodity exporters, but around two thirds of credit booms in the last four decades in commodity exporters have been associated with high commodity prices. In addition, I find that business cycles dynamics are more exacerbated during a credit boom episode in commodity exporters than in non-commodity exporters, and domestic demand variables tend to end below the trend after the peak of a credit boom. A frequency analysis shows that commodity exporters have a higher likelihood of having credit booms ending in a banking crisis and this result is confirmed by a regression analysis. However, commodity exporters do not have a higher incidence of having a credit boom, and net capital inflows and credit growth remain as the main predictors of these episodes.
Keywords: Commodity prices; credit booms; banking crises (search for similar items in EconPapers)
JEL-codes: E51 G01 C23 (search for similar items in EconPapers)
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Working Paper: Credit Booms in Commodity Exporters (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:rbp:wpaper:2018-008
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