Davis, Jonathan Scott; Mack, Adrienne; Phoa, Wesley; … - Federal Reserve Bank of Dallas - 2014
What is the marginal effect of an increase in the private sector debt-to-GDP ratio on the probability of a banking … crisis? This paper shows that the marginal effect of rising debt levels depends on an economy's external position. When the … current account is in surplus or in balance, the marginal effect of an increase in debt is rather small; a 10 percentage point …