Arbeitspapier
Lending standards and output growth
While some credit booms are followed by economic underperformance, many are not. Can lending standards help separate good credit booms from bad credit booms contemporaneously? To observe lending standards internationally, I use information from primary debt capital markets. I construct the high-yield (HY) share of bond issuance for a panel of 38 countries. The HY share is procyclical, suggesting that lending standards in bond markets are extrapolative. Credit booms with deteriorating lending standards (rising HY share) are followed by lower GDP growth in the subsequent three to four years. Such booms deserve attention from policy makers.
- ISBN
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978-92-9472-046-7
- Language
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Englisch
- Bibliographic citation
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Series: ESRB Working Paper Series ; No. 79
- Classification
-
Wirtschaft
Business Fluctuations; Cycles
Financial Markets and the Macroeconomy
Asset Pricing; Trading Volume; Bond Interest Rates
- Subject
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Lending standards
credit cycles
risky debt share
behavioral finance
- Event
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Geistige Schöpfung
- (who)
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Kirti, Divya
- Event
-
Veröffentlichung
- (who)
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European Systemic Risk Board (ESRB), European System of Financial Supervision
- (where)
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Frankfurt a. M.
- (when)
-
2018
- DOI
-
doi:10.2849/844073
- Handle
- Last update
-
10.03.2025, 11:46 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Kirti, Divya
- European Systemic Risk Board (ESRB), European System of Financial Supervision
Time of origin
- 2018
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