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Creditless Recoveries
Author:
Mr. Abdul d Abiad
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Mr. Giovanni Dell'Ariccia
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Ms. Grace B Li
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Series:
IMF Working Papers
Volume/Issue:
Volume 2011: Issue 058
Language:
English
Publication Date:
01 Mar 2011
DOI:
https://doi.org/10.5089/9781455221028.001
ISBN:
9781455221028
ISSN:
1018-5941
Pages:
30
Keywords:
WP; banking crisis; dummy variable
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Recoveries that occur in the absence of credit growth are often dubbed miracles and named after mythical creatures. Yet these are not rare animals, and are not always miracles. About one out of five recoveries is "creditless", and average growth during these episodes is about a third lower than during "normal" recoveries. Aggregate and sectoral data suggest that impaired financial intermediation is the culprit. Creditless recoveries are more common after banking crises and credit booms. Furthermore, sectors more dependent on external finance grow relatively less and more financially dependent activities (such as investment) are curtailed more during creditless recoveries.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2011: Issue 058