Credit Market Imperfections in Middle Income Countries
Working Paper 9737
DOI 10.3386/w9737
Issue Date
In this paper we document three credit market imperfections prevalent in middle income countries that can help explain the boom-bust cycles as well as other macroeconomic patterns observed at higher frequencies across these countries. These imperfections are: the existence of financing constraints that affect mainly the nontradables sector, currency mismatch and systemic bailout guarantees.