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INSTITUTIONS, HOUSEHOLD CREDIT COMPOSITION, AND THE BUSINESS CYCLE
Author(s) -
Bahadir Berrak,
Valev Neven
Publication year - 2020
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/ecin.12885
Subject(s) - economics , business cycle , credit cycle , credit crunch , monetary economics , financial system , macroeconomics
We show that the negative effect of household credit growth on subsequent economic growth documented in the recent literature is not the same across countries. The effect is stronger in countries with weak institutions where the fraction of consumer credit in total household credit is greater. That is an important nuance as consumer credit is a sizable part of household credit in many emerging markets and its rapid buildup should be observed with the same caution as a rapid buildup in housing credit. ( JEL G21 , E32 , E44)