An anatomy of credit booms
Subtitle: evidence from macro aggregates and micro data
By: Enrique G. Mendoza and Marco E. Terrones.
Contributors: Terrones, Marco.
Series: International finance discussion papers -- no. 936; International finance discussion papers (Online) -- no. 936.
Publisher: Federal Reserve Board
Published: 2008
Place of publication: Washington, D.C
Language: eng
Format: Electronic resource
Description: "This paper proposes a methodology for measuring credit booms and uses it to identify credit booms in emerging and industrial economies over the past four decades.  In addition, we use event study methods to identify the key empirical regularities of credit booms in macroeconomic aggregates and micro-level data.  Macro data show a systematic relationship between credit booms and economic expansions, rising asset prices, real appreciations, widening external deficits and managed exchange rates.  Micro data show a strong association between credit booms and firm-level measures of leverage, firm values, and external financing, and bank-level indicators of banking fragility.  Credit booms in industrial and emerging economies show three major differences: (1) credit booms and the macro and micro fluctuations associated with them are larger in emerging economies, particularly in the nontradables sector; (2) not all credit booms end in financial crises, but most emerging markets crises were associated with credit booms; and (3) credit booms in emerging economies are often preceded by large capital inflows but not by financial reforms or productivity gains"--Federal Reserve Board web site.
Notes: Title from PDF file as viewed on 6/18/2009.

Includes bibliographical references.

Also available in print.

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Mode of access: World Wide Web.