Italy after the crisis: a case of recoveryless credit growth

Forte, Antonio (2012): Italy after the crisis: a case of recoveryless credit growth.

Abstract

In this study I compare the credit condition with the economic growth in Italy from January 2007 onward. Starting from the literature on the creditless recovery, I highlight the specific features of the Italian situation in which, notwithstanding the prolonged and deep economic crisis, the credit has persistently continued to grow. A comparison with the German case confirms the peculiar characteristics of the Italian condition. An econometric study supports this idea and, in order to depict this Italian economic situation, I propose a new expression: the recoveryless credit growth.

• Item Type: MPRA Paper
• Language: English
• Keywords: Italy; credit; recovery
• Subjects: E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations ; Cycles; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E50 - General

References

Abiad, A., Dell’Ariccia, G., Li, B., (2011), Creditless recoveries, CEPR Discussion Paper Series No. 8301.

Bernanke, B. S., Lown, C. S., (1991), The Credit Crunch, Brooking Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(2), pages 205-248.

Biggs, M., Mayer, T., Pick, A., (2009), Credit and economic recovery, DNB Working Paper No. 218.

Calvo, G., Izquierdo, A., e Talvi, E., (2006), “Phoenix miracles in emerging markets: recovery without credit from systemic financial crises”, BIS Working Paper No. 221.

Calvo, G., Loo-Kung, R., (2010). US Recovery: A New Phoenix Miracle?. Inter-American Development Bank, Discussion Paper No. 106.

Coricelli F., Roland, I., (2011), “How do credit conditions shape economic recoveries?” CEPR Discussion Paper Series No. 8325.

Claessens, S., Kose, A., and Terrones, M. E., (2008), What happens during the recessions, crunches and busts?, IMF Working Paper No. 274.

Dell’Ariccia, G, Detragiache E and Rajan R (2007) The real effect of banking crises, Journal of Financial Intermediation, v 17 pp 89-112.

Dell’Ariccia, G., and P. Garibaldi (2005). Gross Credit Flows, Reviews of Economic Studies, Vol. 72, No. 3, pp. 665-85.

Demirgüç-Kunt, A., Detragiache, E., Gupta, P., (2006). Inside the crisis: An empirical analysis of banking systems in distress. Journal of International Money and Finance

Draghi, M., (2011). The Governor’s Concluding Remarks, Banca d’Italia, 31 may 2011.

Holmstrom, B., Tirolle, J., (1997). Financial Intermediation, Loanable Funds, and the Real Sector. The Quarterly Journal of Economics, Vol. 112, No. 3, pp 663-691.

Kannan, P., (2010). Credit Conditions and Recoveries from Recessions Associated with Financial Crises, IMF Working Paper No. 83.

Kroszner, R., L. Laeven, and D. Klingebiel (2007). Banking Crises, Financial Dependence, and Growth, Journal of Financial Economics, Vol. 84, pp. 187-228.

Rajan, R. G., and L. Zingales (1998). Financial Dependence and Growth, American Economic Review, Vol. 88, No. 3, pp 559-586.