Discussion Paper
No. 2013-35 | July 08, 2013
Aytül Ganioğlu
Rapid Credit Growth and Current Account Deficit as the Leading Determinants of Financial Crises

Abstract

In this study, the main purpose is to analyze the factors that stimulate the probability of financial crises. The period of analysis covers the years of 1970-2008, thereby including the impact of recent global financial crisis. The analysis aims to make a comparison for the developed and developing country financial crises separately. Panel logit estimation technique is used for the analysis which includes 24 developed and 26 developing countries, amounting to 50 countries as total. According to estimation results, current account deficit and credit expansion carry the risk of raising the probability of financial crises significantly both in advanced countries and developing countries. More specifically, credit expansions in developed countries and current account deficits in developing countries raise the probability of financial crises more strongly.

JEL Classification:

C33, E51, F41, G01

Cite As

Aytül Ganioğlu (2013). Rapid Credit Growth and Current Account Deficit as the Leading Determinants of Financial Crises. Economics Discussion Papers, No 2013-35, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2013-35


Comments and Questions



Anonymous - Referee Report 1
August 21, 2013 - 07:56
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Aytül Ganioğlu - Response to Referee Report 1
September 03, 2013 - 10:31
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Anonymous - Referee Report 2
August 21, 2013 - 07:59
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Aytül Ganioğlu - Response to Referee Report 2
September 03, 2013 - 10:33
see attached file