The real effect of banking crises

This IMF Working Paper says banking crises are usually followed by a decline in credit and growth. It asks whether this is because crises tend to take place during economic downturns, or if banking sector problems have independent negative effects on the economy?

To answer this question the authors examine industrial sectors with differing needs for financing. If banking crises have an exogenous detrimental effect on real activity, then sectors more dependent on external finance should perform

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