VC_RM_CBooms Sweet Sour_IJFE.pdf (610.71 kB)
Why are credit booms sometimes sweet and sometimes sour?
journal contribution
posted on 2020-06-23, 10:18 authored by Vitor CastroVitor Castro, Rodrigo MartinsThis paper investigates the commonalities and differences between benign credit booms and those that end up in banking crises by employing a Multinomial and a Sequential Logit model over a panel of industrial and developing countries. Some economic, political and institutional factors are found to play an important role in understanding the credit booms dynamics. In particular, this study shows that the quantity and price of credit, liquidity in the economy, economic growth, openness of the economy, government orientation, political stability and Central Bank independence are relevant to explain not only the occurrence of credit booms but also – and most importantly – whether they end up in a systemic banking crisis or not. While a better economic environment and Central Bank independence are essential for both industrial and developing countries to avoid credit booms from going badly, political factors seem to exert a stronger influence in developing countries.
History
School
- Business and Economics
Department
- Economics
Published in
International Journal of Finance and EconomicsPublisher
WileyVersion
- AM (Accepted Manuscript)
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© John Wiley & Sons, LtdPublisher statement
This is the peer reviewed version of the following article: CASTRO, V. and MARTINS, R., 2020. Why are credit booms sometimes sweet and sometimes sour? International Journal of Finance and Economics, doi:10.1002/ijfe.1950, which has been published in final form at https://doi.org/10.1002/ijfe.1950. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions.Acceptance date
2020-06-18Publication date
2020-08-10Copyright date
2020ISSN
1076-9307eISSN
1099-1158Publisher version
Language
- en
Depositor
Dr Vitor Castro. Deposit date: 22 June 2020Usage metrics
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