Abstract

http://ssrn.com/abstract=1595980
 
 

References (16)



 
 

Citations (2)



 


 



Credit and Economic Recovery: Demystifying Phoenix Miracles


Michael Biggs


Deutsche Bank, London

Thomas Mayer


Centre for European Policy Studies (CEPS); Deutsche Bank, London

Andreas Pick


Erasmus University Rotterdam (EUR) - Department of Econometrics; De Nederlandsche Bank

March 15, 2010


Abstract:     
This paper offers a solution to the puzzle that economic activity recovers after a financial crisis without a rebound in credit. These credit-less recoveries, known as "Phoenix Miracles", question the importance of credit. We argue that these recoveries appear credit-less because GDP is compared to the stock of credit. We show in a theoretical model that recoveries in GDP coincide with recoveries in the flow of credit and this can occur even as the stock of credit declines. Data from emerging and developed economies confirm this finding.

Number of Pages in PDF File: 25

Keywords: Credit, economic recovery, financial crises

JEL Classification: F30, G01

working papers series


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Date posted: May 24, 2010  

Suggested Citation

Biggs, Michael and Mayer, Thomas and Pick, Andreas, Credit and Economic Recovery: Demystifying Phoenix Miracles (March 15, 2010). Available at SSRN: http://ssrn.com/abstract=1595980 or http://dx.doi.org/10.2139/ssrn.1595980

Contact Information

Michael Biggs
Deutsche Bank, London ( email )
Winchester House
Great Winchester Street, 1
London EC2N 2DB
United Kingdom
Thomas Mayer
Centre for European Policy Studies (CEPS) ( email )
1 Place du Congres, 1000
Brussels, 1000
Belgium
Deutsche Bank, London ( email )
Winchester House
Great Winchester Street, 1
London EC2N 2DB
United States
Andreas Pick (Contact Author)
Erasmus University Rotterdam (EUR) - Department of Econometrics ( email )
P.O. Box 1738
3000 DR Rotterdam
Netherlands
De Nederlandsche Bank ( email )
PO Box 98
1000 AB Amsterdam
Amsterdam, 1000 AB
Netherlands

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