Monetary Policy and Financial Cycles
In our world of free capital mobility, we show that Central banks of large currency areas are drivers of financial cycles and of risk taking in the international economy.
In our world of free capital mobility, we show that Central banks of large currency areas are drivers of financial cycles and of risk taking in the international economy.
Tuesday 19 October 2021 | 1 hour 28 minutes 30 seconds
Emerging markets capital flows are highly sensitive to global conditions. We study the mechanism behind those financial spillovers and find that the distribution of financial intermediaries’ leverage is a good indicator of systemic risk.