IDEAS home Printed from https://ideas.repec.org/a/fip/fedfel/y2012iapr16n2012-12.html
   My bibliography  Save this article

Credit: a starring role in the downturn

Author

Listed:
  • Òscar Jordà

Abstract

Credit is a perennial understudy in models of the economy. But it became the protagonist in the Great Recession, reviving a role it had not played since the Great Depression. In fact, the central part played by credit in the downturn and weak recovery of recent years is not unusual. A study of 14 advanced economies over the past 140 years shows that financial crises have frequently led to severe and prolonged recessions. Shining the spotlight on credit turns out to be crucial in understanding recent economic events and the outlook.

Suggested Citation

  • Òscar Jordà, 2012. "Credit: a starring role in the downturn," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue apr16.
    • Handle: RePEc:fip:fedfel:y:2012:i:apr16:n:2012-12
    as

    Download full text from publisher

    File URL: https://www.frbsf.org/research-and-insights/publications/economic-letter/2012/04/credit-downturn/
    Download Restriction: no
    File URL: https://www.frbsf.org/wp-content/uploads/el2012-12.pdf
    Download Restriction: no
    File URL: https://fraser.stlouisfed.org/files/docs/historical/frbsf/frbsf_let/frbsf_let_20120416.pdf
    Download Restriction: no
    File URL: https://fraser.stlouisfed.org/title/economic-letter-federal-reserve-bank-san-francisco-4960/credit-a-starring-role-downturn-633543
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Taylor, Alan M. & Schularick, Moritz & Jordà , Òscar, 2011. "When Credit Bites Back: Leverage, Business Cycles, and Crises," CEPR Discussion Papers 8678, C.E.P.R. Discussion Papers.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. R. Barrell & D. Karim & C. Macchiarelli, 2020. "Towards an understanding of credit cycles: do all credit booms cause crises?," The European Journal of Finance, Taylor & Francis Journals, vol. 26(10), pages 978-993, July.
    2. Stijn Claessens & M. Ayhan Kose, 2013. "Financial Crises: Explanations, Types and Implications," CAMA Working Papers 2013-06, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    3. Ignacio Lozano-Espitia & Alexander Guarín-López, 2015. "Fragilidad bancaria en Colombia: un análisis basado en las hojas de balance," Chapters, in: Jose E. Gomez-Gonzalez & Jair N. Ojeda-Joya (ed.), Política monetaria y estabilidad financiera en economías pequeñas y abiertas, chapter 10, pages 301-338, Banco de la Republica de Colombia.
    4. Douglas Sutherland & Peter Hoeller, 2012. "Debt and Macroeconomic Stability: An Overview of the Literature and Some Empirics," OECD Economics Department Working Papers 1006, OECD Publishing.
    5. Nicholas Oulton, 2013. "Medium and long run prospects for UK growth in the aftermath of the financial crisis," Discussion Papers 1307, Centre for Macroeconomics (CFM).
    6. Rajesh Sharma, 2018. "Health and economic growth: Evidence from dynamic panel data of 143 years," PLOS ONE, Public Library of Science, vol. 13(10), pages 1-20, October.
    7. repec:ehu:cuader:7603 is not listed on IDEAS
    8. Kaelo Mpho Ntwaepelo, 2021. "The Effects of Macroprudential and Monetary Policy Shocks in BRICS economies," Economics Discussion Papers em-dp2021-20, Department of Economics, University of Reading.
    9. Mahir Binici & Bulent Koksal & Cuneyt Orman, 2013. "Stock Return Co-movement and Systemic Risk in the Turkish Banking System," Central Bank Review, Research and Monetary Policy Department, Central Bank of the Republic of Turkey, vol. 13(Special I), pages 41-63.
    10. William R. White, 2013. "Is Monetary Policy a Science? The Interaction of Theory and Practice over the Last 50 Years," SUERF 50th Anniversary Volume Chapters, in: Morten Balling & Ernest Gnan (ed.), 50 Years of Money and Finance: Lessons and Challenges, chapter 3, pages 73-116, SUERF - The European Money and Finance Forum.
    11. Anton Glavinic, 2013. "Oblikovanje matematickog modela za analizu meduodnosa izmedu odabranih makroekonomskih velicina," Ekonomija Economics, Rifin d.o.o., vol. 19(2), pages 297-310.
    12. Grégory Levieuge, 2017. "Explaining and forecasting bank loans. Good times and crisis," Applied Economics, Taylor & Francis Journals, vol. 49(8), pages 823-843, February.
    13. Alan M. Taylor, 2012. "External Imbalances and Financial Crises," NBER Working Papers 18606, National Bureau of Economic Research, Inc.
    14. Lozej, Matija & Onorante, Luca & Rannenberg, Ansgar, 2023. "Countercyclical capital regulation in a small open economy DSGE model," Macroeconomic Dynamics, Cambridge University Press, vol. 27(5), pages 1230-1267, July.
    15. Alan M. Taylor, 2013. "The Great Leveraging," World Scientific Book Chapters, in: Viral V Acharya & Thorsten Beck & Douglas D Evanoff & George G Kaufman & Richard Portes (ed.), The Social Value of the Financial Sector Too Big to Fail or Just Too Big?, chapter 4, pages 33-65, World Scientific Publishing Co. Pte. Ltd..
    16. Martin Hodula & Ngoc Anh Ngo, 2021. "Does Macroprudential Policy Leak? Evidence from Non-Bank Credit Intermediation in EU Countries," Working Papers 2021/5, Czech National Bank.
    17. Žarko Primorac, 2013. "Hrvatska u novom regionalnom okruženju," Ekonomija Economics, Rifin d.o.o., vol. 19(2), pages 351-360.
    18. Carmen M. Reinhart & Christoph Trebesch, 2016. "The International Monetary Fund: 70 Years of Reinvention," Journal of Economic Perspectives, American Economic Association, vol. 30(1), pages 3-28, Winter.
    19. Franz Hamann & Rafael Hernández & Luisa Silva & Fernando Tenjo G., 2014. "Leverage Pro-cyclicality and Bank Balance Sheet in Colombia," Revista ESPE - Ensayos Sobre Política Económica, Banco de la República, vol. 32(73), pages 50-76, July.
    20. Alan M. Taylor, 2015. "Credit, Financial Stability, and the Macroeconomy," Annual Review of Economics, Annual Reviews, vol. 7(1), pages 309-339, August.

    More about this item

    Keywords

    Credit; Recessions;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedfel:y:2012:i:apr16:n:2012-12. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Federal Reserve Bank of San Francisco Research Library (email available below). General contact details of provider: https://edirc.repec.org/data/frbsfus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.