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Growth-and-risk trade-off

Gespeichert in:

Personen und Körperschaften: Gadea, María Dolores (VerfasserIn), Laeven, Luc (VerfasserIn), Pérez-Quirós, Gabriel (VerfasserIn)
Titel: Growth-and-risk trade-off/ María Dolores Gadea Rivas, Luc Laeven, Gabriel Perez-Quiros
Format: E-Book
Sprache: Englisch
veröffentlicht:
Frankfurt am Main, Germany European Central Bank [2020]
Gesamtaufnahme: Europäische Zentralbank: Working paper series ; no 2397 (April 2020)
Quelle: Verbunddaten SWB
Lizenzfreie Online-Ressourcen
Details
Zusammenfassung: We study the effects of credit over the business cycle, distinguishing between expansions and contractions. We find that there is a growth and risk trade-off in the pace of credit growth over the business cycle. While rapid credit growth tends to be followed by deeper recessions, we also find that credit growth has a positive impact on the duration of expansions. This poses a trade-off for the policymaker: Limiting the buildup of financial risk to avoid a deep recession can negatively affect the cumulation of economic growth during the expansion. We show that intermediate levels of credit growth maximize long-term growth while limiting volatility. Macroprudential policies should be used to manage this growth and risk trade-off, striking a balance between allowing expansions to last longer and avoiding deep recessions.
Umfang: 1 Online-Ressource (circa 55 Seiten); Illustrationen
ISBN: 9789289940405
9289940409
DOI: 10.2866/978428