The Bank for International Settlements, Basel
Sector-specific shocks are a major driver of credit cycles in both the bank and non-bank sectors, a working paper published by the Bank for International Settlements finds.
Authors C Bora Durdu and Molin Zhong say there had been a gap in the literature – there was little study of what drives non-bank credit cycles, interactions with bank credit and how fluctuations in credit spread to the wider economy.
The authors study the issue in a dynamic stochastic general equilibrium framework based on
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