After the 2008 financial crisis, credit growth collapsed in most developed economies, including the eurozone. Whether that fall reflected low demand or constrained supply may seem like a technical issue, but it carries important implications for policymaking and economic performance – and the official answer is probably wrong.
LONDON – Before the financial crisis erupted in 2008, private credit in most developed economies grew faster than GDP. Then credit growth collapsed. Whether that fall reflected low demand for credit or constrained supply may seem like a technical issue. But the answer holds important implications for policymaking and prospects for economic growth. And the official answer is probably wrong.
LONDON – Before the financial crisis erupted in 2008, private credit in most developed economies grew faster than GDP. Then credit growth collapsed. Whether that fall reflected low demand for credit or constrained supply may seem like a technical issue. But the answer holds important implications for policymaking and prospects for economic growth. And the official answer is probably wrong.