reallocated from the private to the public sectors, reducing investment and deepening the recessions even further. To account for …. This implies that domestic debt purchases displace productive investment. The model shows that these purchases reduce …

It is well understood that investment serves as a shock absorber at the time of crisis. The duration of the drag on … investment, however, is perplexing. For the nine Asian economies we focus on in this study, average investment/GDP is about 6 … between the sustained reserve accumulation and the persistent and significantly lower levels of investment in the region. Put …

, fiscal policy, labor costs and interest rates and we propose a strategy to separate the impact of credit cycles, excessive …

inflation, increasing consumption demand and house prices. The power of fiscal stimulus grows when borrowers are more indebted …-term contraction, since redistribution reduces borrower labor supply …

factors behind the U.S. credit crisis. We show that a boom-bust cycle in debt, asset prices and consumption characterizes the …