Header

UZH-Logo

Maintenance Infos

The cleansing effect of banking crises


Gropp, Reint; Ongena, Steven; Rocholl, Jörg; Saadi, Vahid (2020). The cleansing effect of banking crises. London: VoxEU, CEPR Policy Portal.

Abstract

Recessions are periods of low opportunity costs for time and resources, and hence can facilitate a productivity-enhancing reallocation of resources and improve productivity growth. However, recessions can also slow productivity growth by intensifying credit frictions, for instance, through the accumulation of legacy assets in the banking sector. This column investigates the interaction between these two channels in the recent banking crisis and shows that US regions with more restructuring of inefficient banks during the post-Global Crisis recession experienced higher productivity growth in the real sector in subsequent years.

Abstract

Recessions are periods of low opportunity costs for time and resources, and hence can facilitate a productivity-enhancing reallocation of resources and improve productivity growth. However, recessions can also slow productivity growth by intensifying credit frictions, for instance, through the accumulation of legacy assets in the banking sector. This column investigates the interaction between these two channels in the recent banking crisis and shows that US regions with more restructuring of inefficient banks during the post-Global Crisis recession experienced higher productivity growth in the real sector in subsequent years.

Statistics

Additional indexing

Item Type:Scientific Publication in Electronic Form
Communities & Collections:03 Faculty of Economics > Department of Banking and Finance
Dewey Decimal Classification:330 Economics
Language:English
Date:2020
Deposited On:26 Jan 2021 13:07
Last Modified:26 Jan 2021 13:13
Publisher:VoxEU, CEPR Policy Portal
OA Status:Closed
Free access at:Official URL. An embargo period may apply.
Official URL:https://voxeu.org/article/cleansing-effect-banking-crises
Other Identification Number:merlin-id:19684

Download

Full text not available from this repository.
Get full-text in a library