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Political and institutional determinants of credit booms
journal contribution
posted on 2018-12-12, 09:49 authored by Vitor CastroVitor Castro, Rodrigo MartinsThe literature that investigates credit booms has essentially focused on their economic determinants. This paper explores the importance of political conditionings and central bank independence and provides some striking findings on this matter. Estimating a fixed effects logit model over a panel of developed and developing countries for the period 1975q1-2016q4, we find that credit booms are less likely when right-wing parties are in office, especially in developing countries, and when there is political instability. However, they have not proven to depend on the electoral cycle. More independent Central Banks are also found to reduce the probability of credit booms. Moreover, they seem to be more likely to occur and spread within a monetary union.
History
School
- Business and Economics
Department
- Economics
Published in
Oxford Bulletin of Economics and StatisticsVolume
81Issue
5Pages
1144 - 1178Citation
CASTRO, V. and MARTINS, R., 2018. Political and institutional determinants of credit booms. Oxford Bulletin of Economics and Statistics, 81 (5), pp.1144-1178.Publisher
Wiley © The Department of Economics, University of Oxford and John Wiley & Sons Ltd.Version
- AM (Accepted Manuscript)
Publisher statement
This is the peer reviewed version of the following article: CASTRO, V. and MARTINS, R., 2018. Political and institutional determinants of credit booms. Oxford Bulletin of Economics and Statistics, 81 (5), pp.1144-1178, which has been published in final form at https://doi.org/10.1111/obes.12290. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions.Acceptance date
2018-11-27Publication date
2018-12-31ISSN
0305-9049eISSN
1468-0084Publisher version
Language
- en