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
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Englisch
- Erschienen in
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Series: CESifo Working Paper ; No. 4935
- Klassifikation
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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
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credit booms
reputation
financial crises
political popularity
emerging markets
- Ereignis
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Geistige Schöpfung
- (wer)
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Herrera, Helios
Ordoñez, Guillermo
Trebesch, Christoph
- Ereignis
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Veröffentlichung
- (wer)
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Center for Economic Studies and ifo Institute (CESifo)
- (wo)
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Munich
- (wann)
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2014
- Handle
- Letzte Aktualisierung
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10.03.2025, 11:45 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Herrera, Helios
- Ordoñez, Guillermo
- Trebesch, Christoph
- Center for Economic Studies and ifo Institute (CESifo)
Entstanden
- 2014