The credit impulse is the second derivative of credit — not just whether credit is growing, but whether it's accelerating or decelerating.

What It Is:

Credit Impulse = Change in the change of credit

• Credit growing 5% this year vs 3% last year = positive impulse (accelerating)
• Credit growing 3% this year vs 5% last year = negative impulse (decelerating)

Why It Matters:

The economy responds to CHANGES in credit flow, not the level. If credit was growing 10% and drops to 5%, that's a 5% reduction in new spending power even though credit is still growing.

The Lead Time:

Credit impulse leads GDP by 9-12 months. This is remarkably consistent across countries.

Calculating It:

1. Get total credit (bank loans, consumer credit, corporate bonds)
2. Calculate YoY growth
3. Calculate the change in that growth rate vs. prior period

Positive = economy likely accelerating Negative = economy likely slowing