Working Paper: NBER ID: w18290
Authors: Alan M. Taylor
Abstract: What can history tell us about the relationship between the banking system, financial crises, the global economy, and economic performance? Evidence shows that in the advanced economies we live in a world that is more financialized than ever before as measured by importance of credit in the economy. I term this long---run evolution "The Great Leveraging" and present a tenâpoint examination of its main contours and implications.
Keywords: No keywords provided
JEL Codes: E3; E5; E6; N1; N2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Financial crises (G01) | Economic downturns (E32) |
| Credit contractions after crises (F65) | Economic downturns (E32) |
| Past credit booms (E32) | Severity of subsequent recessions (E32) |
| Public debt (H63) | Financial crises (G01) |
| External imbalances (F32) | Financial crises (G01) |
| Private credit growth (E51) | Financial crises (G01) |