Abstract

The first paper in the thesis looks at the relationship between credit and growth. We first show that countries that experience credit booms also witness faster growth on average, although they may end up experiencing occasional crises as well. Next we will aim to show that this relationship is non-linear and depends crucially on the type of credit boom. The second paper looks at how funding shocks, in particular monetary policy announcements, in advanced economies can effect emerging economies via the money market channel. The main hypothesis is that interbank markets provide a more complete picture of the transmission mechanism because they represent the underlying market microstructure and have tight links to domestic monetary policies. We will explore both the time (different policies for same country) and cross-section (same policy for different countries) elements. Finally, we aim to be able to tease out the relative strengths of the various individual channels, which have so far only been studied separately."

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