## Figure 2.11. Higher Riskiness of Credit Allocation Signals Higher Downside Risks to GDP Growth

## Source details

**Canonical URL:** [Figure 2.11. Higher Riskiness of Credit Allocation Signals Higher Downside Risks to GDP Growth](https://www.imf.org/-/media/files/publications/gfsr/2018/april/chapter-2/pdf/figure2-11.pdf)

## Other formats

- [Markdown version](/-/media/files/publications/gfsr/2018/april/chapter-2/pdf/figure2-11.pdf.md)
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### Key findings shown
- The figure presents four panels corresponding to alternative measures of riskiness of credit allocation:
  - 1. Leverage-Based Measure
  - 2. Interest Coverage Ratio–Based Measure
  - 3. Debt Overhang–Based Measure
  - 4. Expected Default Frequency–Based Measure
- For each measure, the panels show the impact of a one unit increase in the riskiness of credit allocation on the 20th and 50th percentiles of the distribution of future cumulative GDP growth from year t to year t + h, with h = 1, 2, 3.
- Time horizons depicted:
  - t + 1
  - t + 2
  - t + 3

### Numerical axis values (as displayed)
- Vertical axis tick labels shown in each panel:
  - –1.0
  - –0.8
  - 0.2
  - –0.4
  - 0.0
  - –0.6
  - –0.2

### Statistical significance coding
- Solid colored bars indicate that the effects are statistically significant at the 10 percent level or higher.
- An empty bar indicates absence of statistical significance.

### Interpretation emphasis (from figure and note)
- A one unit increase in riskiness of credit allocation is associated with downward shifts in the 20th and 50th percentiles of future cumulative GDP growth over horizons t + 1, t + 2, and t + 3.
- The presentation highlights downside risks to GDP growth linked to higher credit risk as captured by multiple measures.

*Source: IMF staff estimates. Note: See Annex 2.3 for methodology.*

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_Source: https://www.imf.org/-/media/files/publications/gfsr/2018/april/chapter-2/pdf/figure2-11.pdf_