Brixiova, Zuzana; Vartia, Laura; Woergoetter, Andreas - 2009
inflows and credit, resulted in skyrocketing house prices and an over-expanded construction sector. However, the currency … board limited the Bank of Estonia’s ability to curb credit growth, while the fiscal policy framework amplified the cycle … through pro-cyclical spending increases and tax cuts. As credit was mostly financed by cross-border loans from foreign banks …