TY  - JOUR
AU  - Shin,Hyun Song
AU  - Shin,Kwanho
TI  - Procyclicality and Monetary Aggregates
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 16836
PY  - 2011
Y2  - February 2011
UR  - http://www.nber.org/papers/w16836
L1  - http://www.nber.org/papers/w16836.pdf
N1  - Author contact info:
Hyun Song Shin
Department of Economics
Princeton University
Princeton, NJ 08544
Tel: 609/258-4467
Fax: 609/258-0771
E-Mail: hsshin@princeton.edu

Kwanho Shin
Korea University
Department of Economics
Seoul 136-701
Korea
Tel: 02-3290-2220
Fax: 02-3290-2719
E-Mail: khshin@korea.ac.kr
M3  - presented at "East Asian Seminar on Economics", June 25-26, 2010
AB  - Financial intermediaries borrow in order to lend.  When credit is increasing rapidly, the traditional deposit funding (core liabilities) is supplemented with other funding (non-core liabilities).  We explore the hypothesis that monetary aggregates reflect the size of non-core and core liabilities and hence convey information on the stage of the financial cycle.  In emerging economies with open capital markets, non-core liabilities of the banking system take the form of short-term foreign exchange liabilities, increasing the vulnerability to the outbreak of “twin crises” where a liquidity crisis is compounded by a currency crisis.
ER  -