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Crises, credit booms and monetary regime

Author

Listed:
  • Youssef Ghallada

    (Center for Research in Economics (CEREC), UCLouvain - Saint-Louis - Bruxelles)

  • Alexandre Girard

    (Center for Research in Economics (CEREC), UCLouvain - Saint-Louis - Bruxelles)

  • Kim Oosterlinck

    (Centre Emile Bernheim (CEB), SBS - E.M., Université Libre de Bruxelles)

Abstract

In theory credit booms, and the crises associated to these booms, should occur more frequently in Fiat monetary regimes than in regimes, such as the Gold Standard, where money creation is constrained. In this note, we investigate whether the importance of the credit boom factor, as an early warning indicator (EWI) of systemic financial crises, varies across monetary regimes for a sample of 17 developed countries over the 1870-2016 period. We find no evidence of a difference between monetary regime for credit-driven crises and this both for the occurrence and the severity of crises.

Suggested Citation

  • Youssef Ghallada & Alexandre Girard & Kim Oosterlinck, 2021. "Crises, credit booms and monetary regime," Economics Bulletin, AccessEcon, vol. 41(3), pages 1431-1443.
    • Handle: RePEc:ebl:ecbull:eb-21-00021
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    References listed on IDEAS

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    More about this item

    Keywords

    Crises Determinants; Early Warning Indicator (EWI); Financial Crises; Monetary Regimes; Boom and Bust Cycles;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • N1 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations

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