Some of the most visible causes for booms and busts in a small, open, financially developing economy include a fragile financial market, exchange rate shocks, and asset price volatility that often result in credit constraints. Because these shocks tend to exaggerate the credit cycles of...

A small, open macro model with new transmission channels is developed to account for the post-crisis structural changes and to evaluate various policy rules for inflation targeting. Given significant changes in transmission channels and the lingering fragility in the financial sector, policy...

The level of household debt had already exceeded the threshold level in 2002 and began to exercise contractionary impact on consumption, jeopardizing the prospects for a sustained recovery. Given that a sizable number of households are now credit constrained, and that the maturity structure of...