Discerning Good from Bad Credit Booms: The Role of Construction

By Giovanni Dell'Ariccia, Ehsan Ebrahimy, Deniz O Igan, Damien Puy

February 12, 2020

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Giovanni Dell'Ariccia, Ehsan Ebrahimy, Deniz O Igan, and Damien Puy. Discerning Good from Bad Credit Booms: The Role of Construction, (USA: International Monetary Fund, 2020) accessed November 23, 2024

Disclaimer: This Staff Discussion Note represents the views of the authors and does not necessarily represent IMF views or IMF policy. The views expressed herein should be attributed to the authors and not to the IMF, its Executive Board, or its management. Staff Discussion Notes are published to elicit comments and to further debate.

Summary

Credit booms are a focal point for policymakers and scholars of financial crises. Yet our understanding of how the real sector behaves during booms, and why some booms may go bad, is limited. Despite a large and growing body of literature, most of the work has focused on aggregate economic activity, and relatively little is known about which industries benefit and which suffer during these episodes. This note aims to fill this gap by analyzing disaggregated output and employment data in a large sample of advanced and emerging market economies between 1970 and 2014.

Subject: Consumer credit, Credit, Credit booms, Employment, Housing prices, Labor, Money, Prices

Keywords: Bad boom, Bank credit, Boom episode, Construction boom, Consumer credit, Credit, Credit boom, Credit boom experience, Credit booms, Employment, Financial crisis, Global, Household credit growth, Housing prices, Labor intensity, Real value, SDN, Value added, X construction

Publication Details

Pages:

36
Volume:

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DOI:

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Issue:

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Series:

Staff Discussion Notes No. 2020/002
Stock No:

SDNEA2020002
ISBN:

9781513529370
ISSN:

2617-6750

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