Research by the Federal Reserve Board of San Francisco shows how high credit growth prior to a financial crisis can prolong the recession by three or more years. The graph below compares the average recovery time for a normal recession to recessions preceded by low credit growth [blue or red] and recessions preceded by high credit growth [green or orange].
Differences in public debt growth appear to have little impact, but public debt levels are another matter.
Read more at Federal Reserve Bank San Francisco | Private Credit and Public Debt in Financial Crises.
Hat tip to Barry Ritholz