{
  "title": "Rapid Credit Growth: Boon or Boom-Bust?",
  "publication": "IMF Working Papers, October 1, 2011",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/rapid-credit-growth-boon-or-boom-bust-25305",
  "canonical": "https://www.imf.org/en/publications/wp/issues/2016/12/31/rapid-credit-growth-boon-or-boom-bust-25305",
  "overlayPath": "/en/publications/wp/issues/2016/12/31/rapid-credit-growth-boon-or-boom-bust-25305/index.md",
  "summary": "Episodes of rapid credit growth, especially credit booms, tend to end abruptly, typically in the form of financial crises. This paper presents the findings of a comprehensive event study focusing on 99 credit booms.",
  "sections": [
    {
      "heading": "Executive summary and main findings",
      "content": "- Episodes of rapid credit growth, especially credit booms, tend to end abruptly, typically in the form of financial crises.\n- The paper presents findings from a comprehensive event study focusing on 99 credit booms.\n- Loose monetary policy stances seem to have contributed to the build-up of credit booms across both advanced and emerging economies.\n- Domestic policy rates were below trend during the pre-peak phase of credit booms and likely fuelled macroeconomic and financial imbalances.\n- For emerging economies:\n  - Credit booms are associated with episodes of large capital inflows.\n  - International interest rates (a proxy for global liquidity) are virtually flat during these periods.\n  - Therefore, although external factors such as global liquidity conditions matter (and possibly increasingly so over time), domestic factors (especially monetary policy) also appear to be important drivers of real credit growth."
    },
    {
      "heading": "Empirical approach and scope",
      "content": "- Method: Comprehensive event study of credit boom episodes.\n- Sample size: 99 credit booms.\n- Geographic coverage: Advanced and emerging economies (including emerging Asia referenced in keywords).\n- Key variables discussed: real credit growth, domestic policy rates, international interest rates (proxy for global liquidity), capital inflows, macroeconomic and financial imbalances."
    },
    {
      "heading": "Policy-relevant implications",
      "content": "- Monetary policy: Domestic policy rates below trend during the pre-peak phase indicate that loose domestic monetary policy can fuel credit booms and associated imbalances.\n- External versus domestic drivers: While global liquidity and external factors matter for credit dynamics in emerging economies, domestic monetary conditions are a significant and direct driver of real credit growth.\n- Macroprudential and policy mix considerations: Results imply attention to domestic monetary stances and capital flow management when addressing rapid credit expansion to mitigate boom-bust risks.\n\n---\n\n Content in this bundle\n\n- wp11241\n  - wp11241 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp11241 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/rapid-credit-growth-boon-or-boom-bust-25305"
    }
  ],
  "bullets": [
    "[Markdown version](/en/publications/wp/issues/2016/12/31/rapid-credit-growth-boon-or-boom-bust-25305/index.md)",
    "[Structured JSON version](/en/publications/wp/issues/2016/12/31/rapid-credit-growth-boon-or-boom-bust-25305/index.json)",
    "[Bundle manifest](/en/publications/wp/issues/2016/12/31/rapid-credit-growth-boon-or-boom-bust-25305/bundle-manifest.json)",
    "Authors: Selim A Elekdag, Yiqun Wu",
    "Published: October 1, 2011",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781463922627.001",
    "Episodes of rapid credit growth, especially credit booms, tend to end abruptly, typically in the form of financial crises.",
    "The paper presents findings from a comprehensive event study focusing on 99 credit booms.",
    "Loose monetary policy stances seem to have contributed to the build-up of credit booms across both advanced and emerging economies.",
    "Domestic policy rates were below trend during the pre-peak phase of credit booms and likely fuelled macroeconomic and financial imbalances.",
    "For emerging economies:",
    "Method: Comprehensive event study of credit boom episodes.",
    "Sample size: 99 credit booms.",
    "Geographic coverage: Advanced and emerging economies (including emerging Asia referenced in keywords).",
    "Key variables discussed: real credit growth, domestic policy rates, international interest rates (proxy for global liquidity), capital inflows, macroeconomic and financial imbalances.",
    "Monetary policy: Domestic policy rates below trend during the pre-peak phase indicate that loose domestic monetary policy can fuel credit booms and associated imbalances.",
    "External versus domestic drivers: While global liquidity and external factors matter for credit dynamics in emerging economies, domestic monetary conditions are a significant and direct driver of real credit growth.",
    "Macroprudential and policy mix considerations: Results imply attention to domestic monetary stances and capital flow management when addressing rapid credit expansion to mitigate boom-bust risks.",
    "**_wp11241**"
  ],
  "related": [
    {
      "title": "_wp11241",
      "role": "document",
      "sourceUrl": "https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2011/_wp11241.pdf",
      "summary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2011/_wp11241.pdf.md",
        "mime": "text/markdown"
      },
      "binary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2011/_wp11241.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/publications/wp/issues/2016/12/31/rapid-credit-growth-boon-or-boom-bust-25305/index.md",
    "json": "/en/publications/wp/issues/2016/12/31/rapid-credit-growth-boon-or-boom-bust-25305/index.json",
    "bundleManifest": "/en/publications/wp/issues/2016/12/31/rapid-credit-growth-boon-or-boom-bust-25305/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-18T04:25:57.091Z"
}