Arbeitspapier

Political Booms, Financial Crises

We show that political booms, measured by the rise in governments' popularity, predict financial crises above and beyond other better-known early warning indicators, such as credit booms. This predictive power, however, only holds in emerging economies. We show that governments in emerging economies are more concerned about their reputation and tend to ride the short-term popularity benefits of weak credit booms rather than implementing politically costly corrective policies that would help prevent potential crises. We provide evidence of the relevance of this reputation mechanism.

Sprache
Englisch

Erschienen in
Series: CESifo Working Paper ; No. 4935

Klassifikation
Wirtschaft
Asymmetric and Private Information; Mechanism Design
Financial Markets and the Macroeconomy
Money Supply; Credit; Money Multipliers
Central Banks and Their Policies
Financial Crises
Crisis Management
Economic History: Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations: General, International, or Comparative
Economic History: Financial Markets and Institutions: General, International, or Comparative
Thema
credit booms
reputation
financial crises
political popularity
emerging markets

Ereignis
Geistige Schöpfung
(wer)
Herrera, Helios
Ordoñez, Guillermo
Trebesch, Christoph
Ereignis
Veröffentlichung
(wer)
Center for Economic Studies and ifo Institute (CESifo)
(wo)
Munich
(wann)
2014

Handle
Letzte Aktualisierung
10.03.2025, 11:45 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Herrera, Helios
  • Ordoñez, Guillermo
  • Trebesch, Christoph
  • Center for Economic Studies and ifo Institute (CESifo)

Entstanden

  • 2014

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