Credit growth seems to be the best predictor of future financial instability. This is the lesson that Jorda et. al (2011) draw from looking at aggregate data from 14 countries over the past 140 years. Mian & Sufi (2016) refine this result and find that growth in household credit leads to lower output growth subsequently. … Continue reading Credit & Macroeconomics: An incomplete survey of empirical evidence
The TSEconomist 