Credit Market Imperfections in Middle Income Countries

31 Pages Posted: 9 Jun 2003 Last revised: 2 Nov 2010

See all articles by Aaron Tornell

Aaron Tornell

University of California, Los Angeles (UCLA) - Department of Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute)

Frank Westermann

University of Osnabrueck - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

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Date Written: June 2003

Abstract

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.

Suggested Citation

Tornell, Aaron and Westermann, Frank, Credit Market Imperfections in Middle Income Countries (June 2003). NBER Working Paper No. w9737. Available at SSRN: https://ssrn.com/abstract=414241

Aaron Tornell (Contact Author)

University of California, Los Angeles (UCLA) - Department of Economics ( email )

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Frank Westermann

University of Osnabrueck - Department of Economics ( email )

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Osnabrueck, D-49069
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CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

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Munich, 01069
Germany

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