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VOLUME
3, NUMBER 1, 2004
AUTHORS:
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Elias Brandt
Economic Research Assistant, Federal Reserve Bank of Dallas
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Scott Dressler
Ph.D. Student, University of Texas at Austin |
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Erwan Quintin
Senior Economist, Federal Reserve Bank of Dallas |
TITLE:
The
Real Impact of Financial Crises (PDF)
ABSTRACT:
Output falls precipitously in
most emerging nations that experience financial crises. The authors conjecture
that a significant part of the real impact of financial crises is due
to the fact that during turbulent times firms choose to leave a large
fraction of productive resources idle until business conditions improve.
In the case of Mexico’s 1994–95 crisis, they calculate that
capital utilization could account for as much as half the drop in standard
measures of total factor productivity. Capital utilization matters much
more during financial crises than during other periods, they argue, because
crises create ideal conditions for large swings in utilization rates.
SUGGESTED
CITATION:
Brandt, Elias, Scott Dressler, and Erwan Quintin
(2004), “The Real Impact of Financial Crises,” Federal Reserve Bank of
Dallas Economic and Financial Policy Review, Vol. 3, No. 1, http://dallasfed.org/research/efprpdfs/
v03_n01_a01.pdf.
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