Identifying excessive credit growth and leverage

  title={Identifying excessive credit growth and leverage},
  author={Lucia Alessi and Carsten Detken},
This paper aims at providing policymakers with a set of early warning indicators helpful in guiding decisions on when to activate macroprudential tools targeting excessive credit growth and leverage. To robustly select the key indicators we apply the “Random Forest” method, which bootstraps and aggregates a multitude of decision trees. On these identified key indicators we grow a binary classification tree which derives the associated optimal early warning thresholds. By using credit to GDP… CONTINUE READING


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