Working Papers

The Financial System




The Medium-Term Impacts of the Global Financial Crisis

Author:Kenichi Ueda, Kei Uzui


Seven years after the Global Financial Crisis (GFC), we investigate how the recoveries are affected by policies and pre-crisis conditions. We find that the macroeconomic and credit-enhancing policies are not beneficial, perhaps detrimental, to the recovery from the GFC, based on the cross-country regression study using 38 countries. However, sound pre-crisis conditions help countries to recover from the crisis more quickly, especially, the low government debt to GDP ratio, the ample foreign reserves, and the absence of a real estate boom. Thus, monitoring those variables is a key to preventing a future crisis or to getting out of it more quickly.