Essays on creditless recoveries

A large body of the literature on finance and economic growth has been devoted to the impact of financial shocks and credit market imperfections on the real economy. On the one hand, financial frictions facilitate the propagation of business cycles, amplifying the effect of shocks that originate in the real economy. On the other hand, exogenous financial shocks may be also the primitive trigger of wide fluctuations in relevant real variables. Whatever the channel, access to bank credit constitutes for sure an essential source through which finance supports a sustainable growth. Accordingly, we should expect that national GDP and bank credit to the private sector move always in the same direction, even in cases of short term fluctuations of the business cycle. However, empirical evidence shows that this is not always true. Many cases exist in which recessions were followed by a recovery in national GDP without a corresponding recovery in domestic and external credit to the private sector. These episodes have been treated in the literature under the name of creditless recoveries. The dissertation takes both a theoretical and an empirical approach to investigate the determinants and consequences of these puzzling phenomena.