Financial Crises: Explanations, Types, and Implications; by Stijn Claessens and M. Ayhan Kose; imf working Paper 13/28; January 1, 2013

V.   R

EAL AND 

F

INANCIAL 

I

MPLICATIONS OF 

C

RISES

 

Macroeconomic and financial consequences of crises are typically severe and share many 

commonalities across various types. While there are obviously differences between crises, 

there are many similarities in terms of the patterns macroeconomic variables follow during 

these episodes. Large output losses are common to many crises and other macroeconomic 

variables (consumption, investment and industrial production) typically register significant 

declines. And financial variables like asset prices and credit usually follow qualitatively 

similar patterns across crises, albeit with variations in terms of duration and severity. This 

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section provides a summary of the literature on the macroeconomic and financial 

implications of crises.