Credit Conditions and Recoveries from Recessions Associated with Financial Crises /

Recoveries from recessions associated with a financial crisis tend to be sluggish. In this paper, we present evidence that stressed credit conditions are an important factor constraining the pace of recovery. In particular, using industry-level data, we find that industries relying more on external...

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Detalhes bibliográficos
Autor principal: Kannan, Prakash
Formato: Periódico
Idioma:English
Publicado em: Washington, D.C. : International Monetary Fund, 2010.
Colecção:IMF Working Papers; Working Paper ; No. 2010/083
Acesso em linha:Full text available on IMF
Descrição
Resumo:Recoveries from recessions associated with a financial crisis tend to be sluggish. In this paper, we present evidence that stressed credit conditions are an important factor constraining the pace of recovery. In particular, using industry-level data, we find that industries relying more on external finance grow more slowly than other industries during recoveries from recessions associated with financial crises. Additional tests, based on establishment size, on alternative definitions of financial crises, and on corporate-government interest rate spreads, support the findings. Moreover, for subsets of industries where financial frictions are more severe, we find much stronger differential growth effects.
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Descrição Física:1 online resource (34 pages)
Formato:Mode of access: Internet
ISSN:1018-5941
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