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Financial Crises, Regulation and Growth

Author

Listed:
  • Ray Barrell

    (National Institute of Economic and Social Research, r.barrell@niesr.ac.uk)

  • Ian Hurst

    (National Institute of Economic and Social Research)

  • Simon Kirby

    (National Institute of Economic and Social Research)

Abstract

The paper discusses the effects on growth of a systemic banking crisis as a result of debt defaults. These effects will come from the impact of credit rationing on consumption and credit and from the impacts of a significant rise in the spread between lending and borrowing rates for both producers and consumers. The analysis uses the dynamic stochastic general equilibrium version of the National Institute global model. The paper also investigates the impact on output of a permanent, regulation induced, rise in margins in the financial sector, taking into account the impacts of regulation on equity market valuations.

Suggested Citation

  • Ray Barrell & Ian Hurst & Simon Kirby, 2008. "Financial Crises, Regulation and Growth," National Institute Economic Review, National Institute of Economic and Social Research, vol. 206(1), pages 56-65, October.
    • Handle: RePEc:sae:niesru:v:206:y:2008:i:1:p:56-65
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    Cited by:

    1. FitzGerald, John & Goggin, Jean & Bergin, Adele, 2008. "Economic Assessment of the Euro Area: Autumn Report 2008," Research Series, Economic and Social Research Institute (ESRI), number sustat27.
    2. Mohammed Dore & Rajiv Singh, 2012. "The Role of Credit in the 2007–09 Great Recession," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 40(3), pages 295-313, September.
    3. McSweeney, Brendan, 2009. "The roles of financial asset market failure denial and the economic crisis: Reflections on accounting and financial theories and practices," Accounting, Organizations and Society, Elsevier, vol. 34(6-7), pages 835-848, August.
    4. Euroframe – European Forecasting Research Association for the Macro-Economy, 2008. "Economic Assessment of the Euro Area. Autumn Report 2008," WIFO Studies, WIFO, number 34439, March.

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