Browsing by Subject "credit boom"

Sort by: Order: Results:

Now showing items 1-2 of 2
  • Juselius, Mikael; Drehmann, Mathias (2016)
    Bank of Finland Research Discussion Papers 3/2016
    Also available in Oxford Bulletin of Economics and Statistics 82 ; 2 https://doi.org/10.1111/obes.12330
    In addition to leverage, the debt service burden of households and firms is an important link between financial and real developments at the aggregate level. Using US data from 1985 to 2013, we find that the debt service burden has sizeable negative effects on expenditure. Its interplay with leverage also explains several data puzzles, such as the lack of above-trend output growth during credit booms and the depth and length of ensuing recessions, without appealing to large shocks or non-linearities. Using data up to 2005, our model predicts paths for credit and expenditure that closely match actual developments before and during the Great Recession.
  • Juselius, Mikael; Drehmann, Mathias (2020)
    Oxford Bulletin of Economics and Statistics 2
    Published in Bank of Finland Research Discussion Papers 3/2016 http://urn.fi/URN:NBN:fi:bof-201604051073
    In addition to leverage, the debt service burden of households and firms is an important link between financial and real developments at the aggregate level. Using US data from 1985 to 2017, we find that the debt service burden has sizeable negative effects on expenditure. Its interplay with leverage also explains several data puzzles, including the lack of above trend output growth during credit booms and the severity of ensuing recessions, without appealing to large shocks or nonlinearities. Estimating the model with data up to 2005, it predicts credit and expenditure paths that closely match actual developments before and during the Great Recession.