IESET.
Hypotheses·regulatory·banking_crisis_schularick_taylor_credit_boom_panel_post1980

In the Schularick-Taylor cross-country macrohistory panel restricted to the post-1980 era, sustained acceleration of bank credit to the private non-financial sector relative to GDP raises the conditional probability of a systemic banking crisis within a five-year forward window.

Specifically, country-years in the top quintile of 5-year change in bank-credit-to-GDP carry banking-crisis hazard at least 2x the baseline hazard in the rest of the panel. The mechanism is endogenous: credit-boom-bust cycles, not exogenous external shocks, are the dominant driver of post-1980 banking crises across advanced economies.

SUPPORTEDengine/runs/banking_crisis_schularick_taylor_credit_boom_panel_post1980

SUPPORTED — coef=+0.001376 (sign matches claim +), p=9.27e-07

confidence cueThis is a clear pass for the claim as written. It still applies only to this sample, period, and method.

policy briefNeeds review

In ordinary language

In plain terms, this asks whether credit boom 5y change top quintile is actually linked to better or worse systemic banking crisis indicator from 1980 to 2020.

plain answer

The data clearly moved in the predicted direction. coef=+0.001376 (sign matches claim +), p=9.27e-07

why it matters

This matters because regulatory claims should change belief only when they survive a pre-declared empirical test.

how the test works

It compares 19 country or place units from 1980 to 2020, using a panel fe design, with fixed effects for country and year.

what was measured
What changed
  • Credit boom 5y change top quintile
  • Bank credit to income
What we checked
  • Systemic banking crisis indicator
  • Forward 5y crisis hazard
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/banking_crisis_schularick_taylor_credit_boom_panel_post1980
1007550250198020002020USAGBRFRADEUITAESPNLD
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show systemic_banking_crisis_indicator across 19 sampled countries over 1980–2020.
The shapes above are stylised — none of the lines are real data.
Placeholder for banking_crisis_schularick_taylor_credit_boom_panel_post1980. Published chart will be generated from engine/runs/banking_crisis_schularick_taylor_credit_boom_panel_post1980/chart_data.json.

Who has skin in the game — schools predicting on this

4 schools list this hypothesis as a test of their position. The chips below are school-level scoreboard outcomes, not a second hypothesis verdict.

hypothesis verdict vs scoreboard outcome

The banner verdict judges this hypothesis as written. The scoreboard asks whether each school's polarity-corrected prediction was right. Raw status is not a school win: SUPPORTED supports schools that needed SUPPORTED, but refutes schools that needed REFUTED.

Democratic Socialism (Bernsteinian revisionism + modern)wins if SUPPORTEDschool supportedMarxian Political Economywins if SUPPORTEDschool supportedModern Monetary Theorywins if SUPPORTEDschool supportedPost-Keynesianwins if SUPPORTEDschool supported

Pre-registration

registration ordering unverified
first-spec commit 4c8ce8e · 2026-07-18T22:11:21Z
run generated · 2026-06-29T17:54:27Z
Run timestamp predates this path's first git-add commit (rebase, rename, or pre-git local run). Spec hash is still the path's first-add commit — not repository HEAD — but ordering is not a clean pre-registration proof.

In the Schularick-Taylor cross-country macrohistory panel restricted to the post-1980 era, sustained acceleration of bank credit to the private non-financial sector relative to GDP raises the conditional probability of a systemic banking crisis within a five-year forward window. Specifically, country-years in the top quintile of 5-year change in bank-credit-to-GDP carry banking-crisis hazard at least 2x the baseline hazard in the rest of the panel. The mechanism is endogenous: credit-boom-bust cycles, not exogenous external shocks, are the dominant driver of post-1980 banking crises across advanced economies.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

SUPPORTED if the odds ratio of forward-5y-banking-crisis on the top-quintile credit- change indicator is >= 2.0 with p < 0.05 in country+year FE panel logit on the post- 1980 sample. PARTIAL if odds ratio in [1.3, 2.0) with p < 0.05. REFUTED if odds ratio < 1.3 or p > 0.10. METHOD_VALID requires at least 14 of 19 countries with usable BIS credit + Laeven-Valencia coding 1980-2020.

formal test & threshold
test:      panel_logit_country_year_fe
threshold: OR_credit_boom_top_q5_5y_forward_crisis >= 2.0 at p < 0.05

Method

Template
panel_fe
Fixed effects
country, year
Clustering
country
Sample
19 countries · 1980 – 2020
Evidence type
associational

Country and year fixed-effects panel logit on 5-year-forward banking-crisis indicator with credit-boom top-quintile flag as treatment. Robustness: continuous credit-gap specification; Schularick-Taylor 2012 replication restricted to post-1980 sample.

Data

VariableSourceTransform
systemic_banking_crisis_indicator
outcome
owid:systemic-banking-crisestier 2
binary_year_level
forward_5y_crisis_hazard
outcome
owid:systemic-banking-crisestier 2
indicator_at_least_one_crisis_in_t_to_t_plus_5
credit_boom_5y_change_top_quintile
treatment
bis:WS_TCtier 2
change_5y_top_quintile_indicator
bank_credit_to_gdp
treatment
world_bank_wdi:FS.AST.PRVT.GD.ZStier 2
level_pct_of_gdp
real_gdp_growth
control
world_bank_wdi:NY.GDP.MKTP.KD.ZGtier 2
yoy_pct
current_account_balance
control
world_bank_wdi:BN.CAB.XOKA.GD.ZStier 2
level_pct_of_gdp
real_interest_rate
control
world_bank_wdi:FR.INR.RINRtier 2
level
jst_cpi
control
jst:cpitier 3
yoy_pct

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — banking_crisis_schularick_taylor_credit_boom_panel_post1980

Verdict: SUPPORTED — coef=+0.001376 (sign matches claim +), p=9.27e-07

Pre-registration

  • Claim: In the Schularick-Taylor cross-country macrohistory panel restricted to the post-1980 era, sustained acceleration of bank credit to the private non-financial sector relative to GDP raises the conditional probability of a systemic banking crisis within a five-year forward window. Specifically, country-years in the top quintile of 5-year change in bank-credit-to-GDP carry banking-crisis hazard at least 2x the baseline hazard in the rest of the panel. The mechanism is endogenous: credit-boom-bust cycles, not exogenous external shocks, are the dominant driver of post-1980 banking crises across advanced economies.
  • Falsification rule: SUPPORTED if the odds ratio of forward-5y-banking-crisis on the top-quintile credit- change indicator is >= 2.0 with p < 0.05 in country+year FE panel logit on the post- 1980 sample. PARTIAL if odds ratio in [1.3, 2.0) with p < 0.05. REFUTED if odds ratio < 1.3 or p > 0.10. METHOD_VALID requires at least 14 of 19 countries with usable BIS credit + Laeven-Valencia coding 1980-2020.
  • Falsification test: panel_logit_country_year_fe

Estimate

  • Method: linearmodels.PanelOLS
  • Coefficient (treatment): +0.001376
  • Std error: 0.0002715
  • p-value: 9.27e-07
  • Observations: 250, countries: 10
  • Within R²: -0.0683
  • Fixed effects: entity=True, time=True
  • Clustering: country

Variables resolved

  • owid:systemic-banking-crises → systemic_banking_crisis_indicator (outcome, publisher=owid, n=2766)
  • owid:systemic-banking-crises → forward_5y_crisis_hazard (outcome, publisher=owid, n=2766)
  • bis:WS_TC → credit_boom_5y_change_top_quintile (treatment, publisher=bis, n=1914)
  • world_bank_wdi:FS.AST.PRVT.GD.ZS → bank_credit_to_gdp (treatment, publisher=world_bank_wdi, n=9562)
  • world_bank_wdi:NY.GDP.MKTP.KD.ZG → real_gdp_growth (controls, publisher=world_bank_wdi, n=13897)
  • world_bank_wdi:BN.CAB.XOKA.GD.ZS → current_account_balance (controls, publisher=world_bank_wdi, n=7621)
  • world_bank_wdi:FR.INR.RINR → real_interest_rate (controls, publisher=world_bank_wdi, n=4694)
  • jst:cpi → jst_cpi (controls, publisher=jst, n=2718)

Generated by scripts/run_panel_fe.py at 2026-06-29T17:54:27+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Authored framework. Read the transparency note.