Countries that have experienced financial crises tend to grow faster on average than those with stable credit conditions. A model shows that financial crises can lead to higher growth, but also bring risks like currency mismatches and occasional self-fulfilling crises. Taking on credit risk can actually improve welfare and move the economy closer to an optimal level. The model is based on real-world features of recent crises, like foreign currency debt, costly crises causing bankruptcies, and uneven impacts on different sectors.