Further processing options
Growth-and-risk trade-off
Saved in:
| Authors and Corporations: | , , |
|---|---|
| Title: | Growth-and-risk trade-off/ María Dolores Gadea Rivas, Luc Laeven, Gabriel Perez-Quiros |
| Type of Resource: | E-Book |
| Language: | English |
| published: |
Frankfurt am Main, Germany
European Central Bank
[2020]
|
| Series: |
Europäische Zentralbank: Working paper series ; no 2397 (April 2020)
|
| Source: | Verbunddaten SWB Lizenzfreie Online-Ressourcen |
| Abstract: | 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. |
|---|---|
| Physical Description: | 1 Online-Ressource (circa 55 Seiten); Illustrationen |
| ISBN: |
9789289940405
9289940409 |
| DOI: | 10.2866/978428 |