ROMANIA IN A POST-CREDIT CRUNCH WORLD? A CAUTIONARY TALE FROM AUSTRALIA AND AMERICA

We present data on debt accumulation in Australia and the United States, and tentative data on Romania, to pose the question of whether Romania might experience a credit crunch as a result of the US subprime financial crisis. We develop a model of a credit crunch in a pure credit economy with endogenous money creation to show how changes in bank lending practices and borrower repayment behaviour can bring about an economic decline.

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Year of publication:	2009
Authors:	Costea, Carmen ; Keen, Steve
Published in:	Journal for Economic Forecasting. - Institutul de Prognoza Economica. - Vol. 6.2009, 1, p. 16-35
Publisher:	Institutul de Prognoza Economica
Subject:	Macroeconomics \| Monetary Policy \| Debt Deflation \| Financial Instability

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Type of publication:	Article
Language:	English
Classification:	E12 - Keynes; Keynesian; Post-Keynesian ; E21 - Consumption; Saving ; E31 - Price Level; Inflation; Deflation ; E44 - Financial Markets and the Macroeconomy ; E51 - Money Supply; Credit; Money Multipliers ; E52 - Monetary Policy (Targets, Instruments, and Effects) ; E63 - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization ; E66 - General Outlook and Conditions
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005052119