Thus, the crisis has recalled a key point: The finance-growth nexus is not just a long-term phenomenon but has an important cyclical component that was widely underestimated prior to the crisis.
In other words, sustainable output was systematically overestimated during the boom years, as too much of the upturn was attributed to improvements in the underlying trend component and (much) too little to cyclical factors. This happened because the financial cycle at work was not appropriately taken into account.