Credit Booms and Macroeconomic Dynamics : Stylized Facts and Lessons for Low-Income Countries / Marco Arena, Serpil Bouza, Era Dabla-Norris, Kerstin Gerling, Lamin Njie.

Format:

Book

Government document

Author/Creator:

Arena, Marco.

Contributor:

Bouza, Serpil.

Dabla-Norris, Era.

Gerling, Kerstin.

Njie, Lamin.

International Monetary Fund, issuing body.

Series:

IMF Working Papers; Working Paper ; No. 2015/011

IMF Working Papers

Language:

English

Subjects (All):

Bank loans--Developing countries.

Bank loans.

Macroeconomics--Developing countries.

Macroeconomics.

Financial crises--Developing countries.

Financial crises.

Banks and banking--State supervision--Developing countries.

Banks and banking.

Physical Description:

1 online resource (48 p.)

Place of Publication:

Washington, D.C. : International Monetary Fund, 2015.

Summary:

Using a comprehensive database on bank credit, covering 135 developing countries over the period 1960–2011, we identify, document, and compare the macro-economic dynamics of credit booms across low- and middle-income countries. The results suggest that while the duration and magnitude of credit booms is similar across country groups, macro-economic dynamics differ somewhat in low-income countries. We further find that surges in capital inflows are associated with credit booms. Moreover, credit booms associated with banking crises exhibit distinct macroeconomic dynamics, while also reflecting a potentially large deviation of credit from country fundamentals. These results suggest that low-income countries should remain mindful of the inter-linkages between financial liberalization, increased cross-border banking activities, and rapid credit growth.

Contents:

Cover; Abstract; Contents; I. Introduction; Figures; 1.Credit-to-GDP: Levels and Growth; II. Credit Booms: Literature Review; III. Credit Boom Episodes, Event Study, and Empirical Assessment; A. Identification of Credit Boom Episodes: Stylized Facts; 5. Correlation between Credit Booms: Real Credit per Capita and Credit-to-GDP (Mendoza and Terrones' methodology); C. Potential Drivers of Credit Booms; 8. Credit booms and Banking Supervision; D. Empirical Analysis of the Incidence of Credit Boom; 10. Marginal Effects Evaluated at Medians; 4. Increase in the Probability of a Credit Boom

IV. Credit Booms, Banking Crisis, and Financial DeepeningA. Credit Boom Episodes and Banking Crises; 11. Characteristics of Credit Booms Associated with Banking Crisis; B. Behavior of Macroeconomic Variables around Credit Booms; B. Credit Booms and Financial Deepening; 12. Proportion of Credit Booms Associated with Higher Financial Depth by the End of the Boom Episode; V. Conclusions; References; Tables; 1. Number of Credit Booms Episodes: Using Real Credit per capita; 2. Credit Boom Magnitudes: Income Group Summary Statistics

3. Duration of Credit Boom Episodes (years): Using Real Credit per capita4. Credit Boom Episodes and Periods of Sustained Credit Growth; 2. Credit Booms, Economic Activity and Domestic Demand; 3. Credit Booms, Economic Activity and Real Exchange Rate; 6. Capital Inflows Surges before the Peak of Credit Boom Episodes; 7. Credit Booms and Exchange Rate Regimes1/; 9. Credit Booms and Capital Inflows; 5. Credit Booms and Banking Crises; 13. Benchmarking Exercise: Financial Possibility Frontier; Appendixes; 1. Sample of Countries; 2. Description and Definition of Main Variables

3. Boom Episodes List4. Robustness using the Mendoza and Terrones' methodology and application of the Tornell and Westermann's approach; 5. Credit Booms: Significance of Event Window Coefficients; 6. Robustness-Credit Booms and Net Capital Inflows; 7. Robustness-Credit Booms, Financial Reforms and Banking Supervision

Notes:

Description based upon print version of record.

Includes bibliographical references.

Description based on online resource; title from PDF title page (ebrary, viewed March 5, 2015).

ISBN:

9781484340110

1484340116

9781484320600

1484320603