Christoph Trebesch, Helios Herrera, Guillermo Ordoñez, 06 September 2014

Financial crises are often credit booms gone bust. This column argues that ‘political booms’, defined as an increase in government popularity, are also a good predictor of financial crises. The phenomenon of ‘political booms gone bust’ is, however, only observable in emerging markets. In these countries, politicians have more to gain from riding the popularity benefits of unsustainable booms.

Events

CEPR Policy Research