Purpose Using time-series data on the US banking industry for the period 1984Q1-2016Q2, the present study aims to examine the impact of both aggregate and sector-specific non-performing loans (NPLs) on aggregate and sectoral product and labor markets. Design/methodology/approach Using both...

Purpose The study seeks to examine the role of financial development (FD) in the Feldstein–Horioka (FH) puzzle. The novelty of this study is based on the fact that the measures of FD are expanded to account for the qualitative nature of the financial sector (“better finance”)....

Purpose – This paper aims to shed new light on the inability of credit rating agencies (CRAs) to forecast the recent defaults and so-called quasi-defaults of rich countries. It also describes how Moody’s sovereign rating methodology has been modified – and could be further improved – to...

Purpose The purpose of this paper is to test whether financial crises themselves provide some degree of ex post discipline. In other words, is there learning from the mistakes associated with crises? The authors test this hypothesis on credit growth, a frequent contributor to banking crises....

Purpose This paper aims to complement to standard Basel countercyclical capital buffer framework by suggesting additional measures for credit gaps that can be used to measure the financial cycle and to decide on countercyclical capital buffers for banks. Design/methodology/approach The paper...

Purpose A comprehensive understanding business cycles needs to account not only for the allocation of resources over time but also for resource allocation across industries at any point in time. But to properly understand how these “time-distortions” take place and how the price mechanisms...

Purpose The recent international financial crisis and the subsequent Great Recession has underlined the need to gain a better understanding of the linkages between financial factors and the real economy. The purpose of this paper is to explore the contributions of financial shocks to...