Credit booms can lead to either good outcomes or financial crises. The researchers found that credit booms typically start with increased productivity growth, but this growth declines faster during bad booms. They developed a model that suggests crises occur when credit booms shift towards a more cautious approach to collateral evaluation. This shift is more likely to lead to a crisis when collateral is tied to low-productivity projects. The main factor behind these crises is the default probability associated with measured productivity.