varies over time. These information dynamics determine the evolution of credit, output and productivity, which feeds back … into incentives to produce information. We characterize this intricate dynamic relation. A credit boom happens when …. Information about firms' individual productivities over credit booms can prevent or tame the crisis, acting as an endogenous …

discounted more heavily by lenders, compared to firms which have credit histories (but are otherwise identical), and that this … reputation effect in debt prices is confirmed: the debt of new banks is discounted more heavily than banks with credit histories …

Credit booms are not rare and usually precede financial crises. However, some end in a crisis (bad booms) while others … do not (good booms). We document that credit booms start with an increase in productivity, which subsequently falls much … faster during bad booms. We develop a model in which crises happen when credit markets change to an information regime with …