Giacomo De Giorgi’s new study catches the attention of the international press

A new study by GSEM Professor Giacomo De Giorgi and the economists Stefania Albanesi of the University of Pittsburgh and Jaromir Nosal of Boston College sheds a new light on the causes and the consequences of the 2007-2009 financial crisis. The notion that it was caused by credits borrowed by people to buy houses they could not afford is not quite accurate.

In the paper entitled Credit Growth and the Financial Crisis: A New Narrative , Professor Giacomo De Giorgi and his co-authors analyzed a huge dataset of anonymous credit scores from Equifax, a credit-reporting bureau and their findings suggest an alternative narrative that challenges the large role of subprime credit in the crisis.

They found that the biggest growth of mortgage debt during the housing boom came from those with credit scores in the middle and top of the credit score distribution—and that these borrowers accounted for a disproportionate share of defaults.

Several international Medias, such as the American news and opinion website “Vox”, the American financial Magazine “Bloomberg Markets”, the Austrian “Der Standard” and the news website “Quartz” have reported the results of this study:

• To read the whole paper of Prof. De Giorgi and his co-authors, please click here.
• To read the whole article of “Vox”, please click here.
• To read the whole article of “Bloombergs Markets”, please click here.
• To read the whole article of “Der Standard”, please click here.
• To read the whole article of “Quartz”, please click here.