Global crisis

Franziska Ohnsorge, Shu Yu, 16 May 2017

Since the Global Crisis, private credit has risen sharply in several emerging market and developing economies as well as advanced economies. This column examines the role of investment alongside these credit booms, and how output growth has been affected. These booms have been unusually ‘investment-less’ in comparison to previous episodes, which were accompanied by investment surges. The absence of investment surges during credit booms is accompanied by lower growth, especially once the credit boom unwinds.

Mélika Ben Salem, Bárbara Castelletti, 15 May 2017

In the aftermath of the Global Crisis, sovereign yield differentials have increasingly widened among European developed countries. Financial markets seem to discriminate among peripheral economies requiring a higher risk premium than is justified by fiscal factors only. This column discusses the causes of this phenomenon. In peripheral countries, it is not due simply to the lack of fiscal discipline, but to a combination of both internal and external imbalances.

Thorsten Beck, Olivier De Jonghe, Klaas Mulier, 09 May 2017

There is little empirical evidence that specialised banks are less stable or perform worse, as suggested by standard portfolio diversification theory. This column uses new data to argue that more specialised banks between 2002 and 2012 did not perform as theory would suggest. More specialised banks, and banks with similar sectoral exposures to their peers, suffered less volatility and had lower exposure to systemic risk. The lack of post-crisis regulatory reform in this area may, accidentally, have been a good thing.

Andrew Fieldhouse, Karel Mertens, Morten Ravn, 02 May 2017

Despite the significant role of housing government-sponsored enterprises in the US mortgage markets, their activities have not been subject to much scrutiny by macroeconomists. Using a monthly sample covering 40 years, this column asks how portfolio mortgage purchase activities have affected the availability of housing credit and key aggregate variables. The results indicate a key role for the agencies in shaping the US economy, as well as significant interactions and similarities between housing credit policies and conventional monetary policy.

Keiichiro Kobayashi, 02 May 2017

There is concern about the persistent slowdown of economic growth in the aftermath of financial crises. This column presents a framework which shows that excessive debt accumulated by firms and households during a crisis can cause persistent stagnation. Relief from excessive debt has a direct impact on economic growth, whereas unconventional monetary and fiscal policies cannot directly solve the fundamental debt problem.

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