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Systemic crisis and growth revisited: Has the global financial crisis marked a new era

Author

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  • Sven Steinkamp

    (Osnabrueck University)

  • Frank Westermann

    (Osnabrueck University)

Abstract

Occasional crises have been shown to be part of growth enhancing mechanism (see Rancière, Tornell and Westermann, 2008). In this paper, we document that neither the stereotypical case study of India vs. Thailand, nor the benchmark growth-regression in this earlier research support this result anymore when updating the sample by one decade that includes the Global Financial Crisis, 2007/8. We analyze the time-varying nature of this relationship in rolling regressions and an historical dataset. In the subset of countries with enforceability problems, we find that the link between occasional crisis, measured by the negative skewness of credit growth, and per-capita output growth still remains intact.

Suggested Citation

  • Sven Steinkamp & Frank Westermann, 2018. "Systemic crisis and growth revisited: Has the global financial crisis marked a new era," GRU Working Paper Series GRU_2018_005, City University of Hong Kong, Department of Economics and Finance, Global Research Unit.
    • Handle: RePEc:cth:wpaper:gru_2018_005
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    6. Aaron Tornell & Frank Westermann & Lorenza Martinez, 2003. "Liberalization, Growth, and Financial Crises: Lessons from Mexico and the Developing World," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 34(2), pages 1-112.
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    Cited by:

    1. Pawel Dlotko & Simon Rudkin & Wanling Qiu, 2019. "Topologically Mapping the Macroeconomy," Papers 1911.10476, arXiv.org.
    2. Filiz Mızrak & Serhat Yüksel, 2019. "Significant Determiners of Greek Debt Crisis: A Comparative Analysis with Probit and MARS Approaches," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 8(3), pages 33-50, July.

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    More about this item

    Keywords

    Long-Term Growth; Systemic Crisis; Financial Liberalization;
    All these keywords.

    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • G01 - Financial Economics - - General - - - Financial Crises

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