This paper explores the link between monetary policies of large industrial countries and international credit cycles. Based on an overinvestment framework, we show that in the prevailing asymmetric world monetary system, monetary policies of large centre countries can fuel credit booms in...

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...

One of the most visible causes for booms and busts in emerging economies is financial market friction. Some of the features of a small, open, financially developing economy include a fragile financial market, exchange rate shocks, and asset price volatility that often result in credit...