Credit-fuelled construction booms lead to busts – IMF research

Credit booms are more likely to end in financial crisis if they have caused rapid construction growth, new research from the International Monetary Fund finds.

Researcher Giovanni Dell’Ariccia and his co-authors use data from a large sample of advanced and emerging market economies from 1970 to 2014. They examine how credit booms and busts affect certain industries. They also investigate the sectoral composition of output and employment during credit booms.

The authors find that credit booms

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