evidence that foreign banking penetration can be associated with a contraction of banking credit, especially in countries with … poor credit markets. Second I present a model in which the presence or the absence of foreign lenders endogenously modifies … firms credit constraints and hence the volume of credit extended in the economy. Specifically, I show on the one hand that …

is to blame.Between Debt and the Devil challenges the belief that we need credit growth to fuel economic growth, and that … rising debt is okay as long as inflation remains low. In fact, most credit is not needed for economic growth-but it drives … the growth and allocation of credit creation, and why debt needs to be taxed as a form of economic pollution. Banks need …

the credit supply process. The economy is susceptible to self-fulfilling credit freezes: banks abstain from lending when … they fear that other banks will withhold lending, and the resultant credit contraction impedes economic growth. Capital … credit to the real economy. However, the equilibrium interest rate reveals public information about economic fundamentals and …