Journal Articles
Credit Growth, Rational Bubbles and Economic Efficiency
Authors
Freixas, X
UPF authors
Type
Scholarly articles
Journal title
Comparative economic studies
Publication year
2018
Volume
60
Number
1
Pages
87-104
ISSN
0888-7233
Publication State
Published
Abstract
Excessive credit growth and the emergence of bubbles increase the likelihood of a systemic crisis. While no causality between credit growth and systemic crises has been empirically established, it seems reasonable to think that excessive credit growth goes hand in hand with the emergence of bubbles and that it is their bursting that triggers a systemic crisis. This article explores the interaction between the demand for bubbly assets and the supply of credit in a dynamic overlapping generations economy and examines the macroprudential policy implications.
Complete citation
Freixas, X. Credit Growth, Rational Bubbles and Economic Efficiency. Comparative economic studies 2018; 60(1): 87-104.
