The Consequences of Banking Crises for Public Debt

Furceri, Davide; Zdzienicka, Aleksandra

doi:10.1111/j.1468-2362.2013.12003.x

Cited by 50 publications

(31 citation statements)

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“…The impact of the financial crisis on productivity growth can also be estimated using simple ordinary least squares (OLS) regression that incorporates crisis as a dummy independent variable and productivity growth as a dependent variable, which allows for the analysis of contemporaneous (static) associations between these variables. The advantage of using the method of impulse responses is that it allows for analyzing the dynamic impacts vis time lags (Furceri and Zdzienicka, ). This offers the opportunity to measure the impact of financial crisis on productivity growth several years after occurrence of the crisis.…”

Section: Methodsmentioning

confidence: 99%

The impact of the 2008 financial crisis on dynamic productivity growth of the Spanish food manufacturing industry. An impulse response analysis

Kapelko

Stefanou

2017

Agricultural Economics

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The emergence of a financial crisis is an event that can impact the fortunes of nearly all economic agents. The focus here is on the 2008 financial crisis and how firms' productivity growth was impacted by this crisis in the years that followed. This article focuses on dynamic productivity growth and its components using a firm-level data set of Spanish meat processing, dairy processing, and oils and fats firms. The impulse response analysis shows that the impact of the crisis on dynamic productivity growth is negative and persistent in the oils and fats industry, initially positive but then negative in the meat processing industry, and positive in the dairy processing industry. The observed magnitudes of change in indicator are between 2% and 5% for oils and fats industries, and of 1% in both dairy and meat industries. Our analysis further confirms that firms' size is an important factor in explaining how crisis impacts dynamic productivity growth and its components, while we find only slight evidence regarding the firms' experience in the market. JEL classifications: C61, D24, G01, L66

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Section: Methodsmentioning

confidence: 99%

The impact of the 2008 financial crisis on dynamic productivity growth of the Spanish food manufacturing industry. An impulse response analysis

Kapelko

Stefanou

2017

Agricultural Economics

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“…The recent experience with recessions has also shown that domestic fiscal policy cannot fully offset output shocks. 1 In addition, counter-cyclical expansionary measures may have significant and longlasting adverse effects on public debt sustainability (Reinhart and Rogoff 2010;Furceri and Zdzienicka 2013), which would, as shown by the recent events in the euro area, threaten the stability of the entire monetary union.…”

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The Euro Area Crisis: Need for a Supranational Fiscal Risk Sharing Mechanism?

2015

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The aim of this paper is to assess the effectiveness of risk sharing mechanisms in the euro area and whether a supranational fiscal risk sharing mechanism could insure countries against very severe downturns. Using an unbalanced panel of 15 euro area countries over the period 1979â\u80\u932010, the results of the paper show that: (i) the effectiveness of risk sharing mechanisms in the euro area is significantly lower than in existing federations (such as the U.S. and Germany) and (ii) it falls sharply in severe downturns just when it is needed most; (iii) a supranational fiscal stabilization mechanism, financed by a relatively small contribution, would be able to fully insure euro area countries against very severe, persistent and unanticipated downturns

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“…There may be another factor that increases public debt and, at the same time, reduces credit: the occurrence of a banking crisis. There is evidence that banking crises are associated with a rise in government debt (Reinhart and Rogoff 2011;Furceri and Zdzienicka 2012). We accordingly consider the effect that previous bank crises might have on the dynamics of lending.…”

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Does Government Debt Affect Bank Credit?

Bonis

Stacchini

2013

International Finance

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This paper analyses 43 countries from 1970 to 2010 to investigate the effect that public debt has on bank loans. The study is motivated by the need to understand the consequences of high public debt, a condition many countries are already experiencing or will experience in the next few years. Looking at the 40-year period, we find that the ratio of government debt to GDP has a negative association with the subsequent growth of bank credit. Our results hold using different econometric methods and controlling for variables such as the lagged value of bank loans, the occurrence of banking crises, per capita GDP, the inflation rate, trade openness, international investment position, stock market capitalization and countries' legal origin.Ã We express our special thanks to the editor and two anonymous referees for very useful suggestions that greatly improved the quality of the paper. We are also grateful to

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The Consequences of Banking Crises for Public Debt

Cited by 50 publications

References 50 publications

The impact of the 2008 financial crisis on dynamic productivity growth of the Spanish food manufacturing industry. An impulse response analysis

The impact of the 2008 financial crisis on dynamic productivity growth of the Spanish food manufacturing industry. An impulse response analysis

The Euro Area Crisis: Need for a Supranational Fiscal Risk Sharing Mechanism?

Does Government Debt Affect Bank Credit?

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