Private credit and public debt in financial crises
Recovery from a recession triggered by a financial crisis is greatly influenced by the government’s fiscal position. A financial crisis puts considerable stress on the government’s budget, sometimes triggering attacks on public debt. Historical analysis shows that a private credit boom raises the odds of a financial crisis. Entering such a crisis with a swollen public debt may limit the government’s ability to respond and can result in a considerably slower recovery.
Year of publication: |
2014
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Authors: | Jorda, Oscar ; Schularick, Moritz ; Taylor, Alan M. |
Published in: |
FRBSF Economic Letter. - Federal Reserve Bank of San Francisco. - 2014, 07
|
Publisher: |
Federal Reserve Bank of San Francisco |
Saved in:
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