NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Stories of the Twentieth Century for the Twenty-First

Pierre-Olivier Gourinchas, Maurice Obstfeld

NBER Working Paper No. 17252
Issued in July 2011
NBER Program(s):   EFG   IFM

A key precursor of twentieth-century financial crises in emerging and advanced economies alike was the rapid buildup of leverage. Those emerging economies that avoided leverage booms during the 2000s also were most likely to avoid the worst effects of the twenty-first century's first global crisis. A discrete-choice panel analysis using 1973-2010 data suggests that domestic credit expansion and real currency appreciation have been the most robust and significant predictors of financial crises, regardless of whether a country is emerging or advanced. For emerging economies, however, higher foreign exchange reserves predict a sharply reduced probability of a subsequent crisis.

download in pdf format
   (835 K)

email paper

This paper is available as PDF (835 K) or via email.

Acknowledgments

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w17252

Published: Pierre-Olivier Gourinchas & Maurice Obstfeld, 2012. "Stories of the Twentieth Century for the Twenty-First," American Economic Journal: Macroeconomics, American Economic Association, vol. 4(1), pages 226-65, January.

Users who downloaded this paper also downloaded these:
Obstfeld w17877 Does the Current Account Still Matter?
Feldstein w17260 What's Next for the Dollar?
Schularick and Taylor w15512 Credit Booms Gone Bust: Monetary Policy, Leverage Cycles and Financial Crises, 1870–2008
Gourinchas, Rey, and Truempler w17353 The Financial Crisis and The Geography of Wealth Transfers
Jordà, Schularick, and Taylor w16567 Financial Crises, Credit Booms, and External Imbalances: 140 Years of Lessons
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us