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Credit Booms, Financial Crises and Macroprudential Policy

Gertler, Mark - 2020

We develop a model of banking crises which Is consistent with two important features of the data: First, banking crises are usually preceded by credit booms. Second, credit booms often do not result in a crisis. That is, there are "good" booms as well as "bad" booms in the language of Gorton and...

Persistent link: https://www.econbiz.de/10012481336

Managing Credit Booms and Busts : A Pigouvian Taxation Approach

Jeanne, Olivier - 2010

We study a dynamic model in which the interaction between debt accumulation and asset prices magnifies credit booms and busts. We find that borrowers do not internalize these feedback effects and therefore suffer from excessively large booms and busts in both credit flows and asset prices. We...

Persistent link: https://www.econbiz.de/10012462279

De facto Fiscal Space and Fiscal Stimulus : Definition and Assessment

Aizenman, Joshua - 2010

We define the notion of a 'de facto fiscal space' of a country as the inverse of the tax-years it would take to repay the public debt. Specifically, we measure the outstanding public debt relative to the de facto tax base, where the latter measures the realized tax collection, averaged across...

Persistent link: https://www.econbiz.de/10012462118

Understanding the Great Depression : Lessons for Current Policy

Cecchetti, Stephen G. - 1997

Over the four years beginning in the summer of 1929, financial markets, labor markets and goods markets all virtually ceased to function. Throughout this, the government policymaking apparatus seemed helpless. Since the end of the Great Depression, macroeconomists have labored diligently in an...

Persistent link: https://www.econbiz.de/10012472803

Boom-Bust Cycles in Middle Income Countries : Facts and Explanation

Tornell, Aaron - 2002

In this paper we characterize empirically the comovements of macro variables typically observed in middle income countries, as well as the boom-bust cycle' that has been observed during the last two decades. We find that many countries that have liberalized their financial markets, have...

Persistent link: https://www.econbiz.de/10012469490

Boom-Busts in Asset Prices, Economic Instability, and Monetary Policy

Bordo, Michael D. - 2002

The link between monetary policy and asset price movements has been of perennial interest to policy makers. In this paper we consider the potential case for pre-emptive monetary restrictions when asset price reversals can have serious effects on real output. First, we provide some historical...

Persistent link: https://www.econbiz.de/10012469748

Monetary Policy for a Bubbly World

Asriyan, Vladimir - 2016

We propose a model of money, credit and bubbles, and use it to study the role of monetary policy in managing asset … bubbles. In this model, bubbles pop up and burst, generating fluctuations in credit, investment and output. Two key insights … emerge from the analysis. First, the growth rate of bubbles, which is driven by agents' expectations, can be set in real or …

Persistent link: https://www.econbiz.de/10012456041

The Business Cycles of Balance-of-Payment Crises : A Revision of Mundellan Framework

Mendoza, Enrique G. - 1999

In his seminal 1960 article Robert Mundell proposed a model of balance-of-payments crises in which confidence in the continuation of a currency peg depended on the observed holdings of central bank foreign reserves. We examine the implications of a reformulation of this view from the perspective...

Persistent link: https://www.econbiz.de/10012471756

Asset Price Bubbles and Systemic Risk

Brunnermeier, Markus K. - 2019

We analyze the relationship between asset price bubbles and systemic risk, using bank-level data covering almost thirty …

Persistent link: https://www.econbiz.de/10012479725

Leverage and Asset Bubbles : Averting Armageddon with Chapter 11?

Miller, Marcus - 2010

An iconic model with high leverage and overvalued collateral assets is used to illustrate the amplification mechanism driving asset prices to 'overshoot' equilibrium when an asset bubble bursts--threatening widespread insolvency and what Richard Koo calls a 'balance sheet recession'

Persistent link: https://www.econbiz.de/10012462797

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