NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
loading...

Procyclicality and Monetary Aggregates

Hyun Song Shin, Kwanho Shin

NBER Working Paper No. 16836
Issued in February 2011
NBER Program(s):Economic Fluctuations and Growth

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.

download in pdf format
   (279 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w16836

Users who downloaded this paper also downloaded* these:
Kaminsky, Reinhart, and Vegh When It Rains, It Pours: Procyclical Capital Flows and Macroeconomic Policies
Hahm, Shin, and Shin w18428 Non-Core Bank Liabilities and Financial Vulnerability
Hahm, Mishkin, Shin, and Shin w17780 Macroprudential Policies in Open Emerging Economies
Mishkin w16755 Monetary Policy Strategy: Lessons from the Crisis
Schularick and Taylor w15512 Credit Booms Gone Bust: Monetary Policy, Leverage Cycles and Financial Crises, 1870-2008
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us