Template-Type: ReDIF-Paper 1.0
Author-Name: Carlos Madeira
Author-X-Name-First: Carlos
Author-X-Name-Last: Madeira
Title: The impact of financial crises on industrial growth: lessons from the last 40 years
Abstract: This work shows the impact of financial crises across industries and the total manufacturing sector. I find both a direct impact of financial crises on all manufacturing growth and an additional effect through an external finance dependence channel. Externally dependent industries experience lower growth during banking and currency crises, especially in emerging markets and developing economies. Banking, currency and sovereign debt crises cause an average reduction in total manufacturing growth of 2.7%, 6% and 1%, respectively, with the direct effect being the most significant component. Finally, I show that macroprudential policies adopted after the Great Financial Crisis attenuated the fall in growth caused by banking crises.
Creation-Date: 2024-09
File-URL: https://www.bis.org/publ/work1214.pdf
File-Format: Application/pdf
File-Function: Full PDF document
File-URL: https://www.bis.org/publ/work1214.htm
File-Format: text/html
Number: 1214
Keywords: financial crises, banking crises, growth, external finance dependence, credit frictions
Classification-JEL: E44, G01, O10, O16
Handle: RePEc:bis:biswps:1214