Creditless Recoveries

31 Pages Posted: 22 Mar 2011

See all articles by Abdul G. Abiad

Abdul G. Abiad

International Monetary Fund (IMF) - Research Department

Bin (Grace) Li

International Monetary Fund

Giovanni Dell'Ariccia

International Monetary Fund (IMF) - Research Department; Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 3 versions of this paper

Date Written: March 2011

Abstract

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.

Keywords: Bank credit, Banking crisis, Business cycles, Credit expansion, Cross country analysis, Developed countries, Economic growth, Economic recovery, Emerging markets, Financial crisis, Industrial investment, Private sector

Suggested Citation

Abiad, Abdul G. and Li, Bin (Grace) and Dell'Ariccia, Giovanni, Creditless Recoveries (March 2011). IMF Working Papers, Vol. , pp. 1-30, 2011. Available at SSRN: https://ssrn.com/abstract=1792224

Abdul G. Abiad (Contact Author)

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Bin (Grace) Li

International Monetary Fund ( email )

700 19th Street NW
Washington, DC 20431
United States

HOME PAGE: http://binli.economics.googlepages.com/

Giovanni Dell'Ariccia

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-8135 (Phone)
202-623-4352 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Register to save articles to
your library

Register

Paper statistics

Downloads
157
Abstract Views
928
rank
172,163
PlumX Metrics