2012/04/01 by Moritz Schularick, Alan M Taylor, Alan M. Taylor · 27 citations
Economics, Econometrics and Finance · #Boom #Bust #Credit crunch #Dynamic stochastic general equilibrium #Economic, financial, and policy analysis #Economics #Finance #Financial accelerator #Financial crisis #Financial system #Global Financial Crisis and Policies #Leverage (statistics) #Macroeconomics #Monetary Policy and Economic Impact #Monetary economics #Monetary policy
paper · doi:10.1257/aer.102.2.1029
published in American Economic Review 102(2), 1029-1061 (American Economic Association)
openalex publication_date 2012/04/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/15
The financial crisis has refocused attention on money and credit fluctuations, financial crises, and policy responses. We study the behavior of money, credit, and macroeconomic indicators over the long run based on a new historical dataset for 14 countries over the years 1870–2008. Total credit has increased strongly relative to output and money in the second half of the twentieth century. Monetary policy responses to financial crises have also been more aggressive, but the output costs of crises have remained large. Credit growth is a powerful predictor of financial crises, suggesting that policymakers ignore credit at their peril. JEL: E32, E44, E52, G01, N10, N20