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http://dspace.mediu.edu.my:8181/xmlui/handle/10419/18815| Title: | Systemic crises and growth |
| Keywords: | O41 F43 F36 F34 ddc:330 financial constraints growth and institutions bailout guarantees volatility emerging markets Finanzmarktkrise Wirtschaftswachstum Kreditmarkt Instrumentalvariablen-Schätzmethode Schätzung Indien Thailand Welt |
| Issue Date: | 16-Oct-2013 |
| Publisher: | |
| Description: | In this paper, we document the fact that countries that have experienced occasional financial crises have, on average, grown faster than countries with stable financial conditions. We measure the incidence of crisis with the skewness of credit growth, and find that it has a robust negative effect on GDP growth. This link coexists with the negative link between variance and growth typically found in the literature. To explain the link between crises and growth we present a model where weak institutions lead to severe financial constraints and low growth. Financial liberalization policies that facilitate risk-taking increase leverage and investment. This leads to higher growth, but also to a greater incidence of crises. Conditions are established under which the costs of crises are outweighed by the benefits of higher growth. |
| URI: | http://koha.mediu.edu.my:8181/xmlui/handle/10419/18815 |
| Other Identifiers: | http://hdl.handle.net/10419/18815 ppn:485186950 |
| Appears in Collections: | EconStor |
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