## Creditless Recoveries

_IMF Working Papers, March 1, 2011_

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**Canonical URL:** [Creditless Recoveries](https://www.imf.org/en/publications/wp/issues/2016/12/31/creditless-recoveries-24707)

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## Bibliographic details
- Authors: Abdul d Abiad, Giovanni Dell'Ariccia, Grace B Li
- Published: March 1, 2011
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781455221028.001

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### Summary
- Recoveries that occur in the absence of credit growth are often dubbed miracles and named after mythical creatures.
- About one out of five recoveries is "creditless".
- Average growth during these episodes is about a third lower than during "normal" recoveries.
- Aggregate and sectoral data suggest that impaired financial intermediation is the culprit.
- Creditless recoveries are more common after banking crises and credit booms.
- Sectors more dependent on external finance grow relatively less and more financially dependent activities (such as investment) are curtailed more during creditless recoveries.

### Key findings and statistics
- Frequency: About one out of five recoveries is "creditless".
- Growth performance: Average growth during creditless recoveries is about a third lower than during "normal" recoveries.
- Sectoral effects: Sectors more dependent on external finance grow relatively less during creditless recoveries.
- Activity impact: Financially dependent activities (such as investment) are curtailed more during creditless recoveries.

### Drivers and empirical analysis
- Impaired financial intermediation is identified as the principal culprit behind creditless recoveries based on aggregate and sectoral data.
- Creditless recoveries occur more frequently following:
  - Banking crises.
  - Credit booms.

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/creditless-recoveries-24707_