2012年-ECB欧洲央行_Money_and_credit_growth_after_economic_and_financial_crises_-_a_historical_global_perspective_17页_551kb

Summary: Money and Credit Growth After Economic and Financial Crises - A Historical Global Perspective

Core Content

This article examines the historical patterns of money and credit growth in relation to economic and financial crises, with a focus on the euro area. It provides a comparative analysis of monetary and credit developments in OECD countries from 1960 to 2010, highlighting how these patterns can serve as a benchmark for understanding current and future trends. The analysis distinguishes between recessions with and without associated banking crises, emphasizing the unique characteristics of the latter.

Main Components of the Study

• Broad Money Growth: Typically aligns with real GDP growth, though less pronounced during downturns. It tends to recover at a moderate pace after recessions, especially those accompanied by banking crises.
• Narrow Money Growth (M1): Acts as a leading indicator of economic turning points. It often declines to near-zero levels before a recession and recovers more quickly than broad money.
• Domestic Credit Growth: Lags behind economic activity and tends to decline more sharply during banking crises. It often shows a delayed recovery, sometimes extending into the initial recovery phase.

Key Observations

• General Patterns:

  • Broad money growth and domestic credit growth typically diverge during the first year of a recession, with M1 growth leading the recovery.
  • During recessions, especially those linked to banking crises, the decline in money and credit growth is more severe and prolonged.
  • The euro area's recent economic slowdown (2008-2010) aligns with these historical patterns, particularly in terms of weak money and credit growth.

• Euro Area Specifics:

  • In 2010, euro area broad money and domestic credit growth reached their lowest levels since 1960.
  • Real M1 growth declined significantly before the recession and showed a delayed recovery, consistent with historical trends.
  • The recovery in broad money and credit growth in 2011 was in line with past recessions with banking crises.

• Factors Influencing Patterns:

  • High levels of private and public sector indebtedness.
  • Interplay between the sovereign debt crisis, investor concerns, and pressure on banks' funding and capital.
  • The international spread of the crisis, which has intensified the interaction between monetary and credit aggregates.

Historical Comparisons

• Great Depression (US):

  • Broad and narrow money declined sharply, with M2 and currency in circulation experiencing a 20% nominal and 10% real contraction.
  • Credit contraction was even more severe, with real credit growth turning negative in 1929 and not recovering until 1936.
  • The recovery was aided by capital inflows and the suspension of the gold standard in 1934.

• "Lost Decade" in Japan:

  • The article references this period as a notable historical episode where money and credit growth diverged significantly from general patterns, indicating the importance of banking crises in shaping monetary outcomes.

Conclusions

• Real broad money growth generally moves in line with real GDP growth, while real narrow money growth tends to lead the economic cycle.
• Domestic credit growth lags behind the business cycle and is more volatile during banking crises.
• The euro area's recent monetary and credit developments align with historical patterns observed during recessions and recoveries in OECD economies.
• While historical benchmarks are useful, the unique nature of the recent crisis, particularly the high levels of indebtedness and banking sector issues, may lead to deviations from these patterns.
• The article underscores the importance of considering both general trends and specific factors when analyzing monetary and credit developments in the context of economic crises.