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Alan Taylor's research cited in The Economist

Alan Taylor's research on the role of credit in financial crises cited in The Economist

A paper by Moritz Schularick (University of Bonn) and Alan Taylor (U.C. Davis), has found that rapid total credit growth was the best predictor of financial crisis from 1870 to 2008. That should provide reassurance in the embattled euro area, where public and private-sector debt levels stabilised in 2013. China, however, has seen its total credit-to-GDP ratio leap 95 percentage points since 2007. Be warned: debt splurges, of either sort, can easily cause a bad hangover.

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