TY  - JOUR
AU  - Mendoza,Enrique G.
AU  - Terrones,Marco E.
TI  - An Anatomy Of Credit Booms: Evidence From Macro Aggregates And Micro Data
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14049
PY  - 2008
Y2  - May 2008
UR  - http://www.nber.org/papers/w14049
L1  - http://www.nber.org/papers/w14049.pdf
N1  - Author contact info:
Enrique G. Mendoza
Department of Economics
University of Maryland
College Park, MD 20742
Tel: 301/405-3845
Fax: 301/405-7835
E-Mail: mendozae@econ.umd.edu

Marco Terrones
Research Department
International Monetary Fund
700 19th Street, N.W.
Washington DC 20431
E-Mail: mterrones@imf.org
AB  - This paper proposes a methodology for measuring credit booms and uses it to identify credit booms in emerging and industrial economies over the past four decades. In addition, we use event study methods to identify the key empirical regularities of credit booms in macroeconomic aggregates and micro-level data. Macro data show a systematic relationship between credit booms and economic expansions, rising asset prices, real appreciations, widening external deficits and managed exchange rates. Micro data show a strong association between credit booms and firm-level measures of leverage, firm values, and external financing, and bank-level indicators of banking fragility. Credit booms in industrial and emerging economies show three major differences: (1) credit booms and the macro and micro fluctuations associated with them are larger in emerging economies, particularly in the nontradables sector; (2) not all credit booms end in financial crises, but most emerging markets crises were associated with credit booms; and (3) credit booms in emerging economies are often preceded by large capital inflows but not by financial reforms or productivity gains.
ER  -