Recent research has found that monetary policy works in part by influencing the risk
premiums on both traded financial-market securities and intermediated loans. Research has …

It surprised investors, who dumped stocks and brought the market index down by 500 points
on Monday. It surprised policymakers, who rushed to rescue other financial institutions after …

We study the relationship between credit expansions, macroeconomic fluctuations, and
financial crises using a novel database on the sectoral distribution of private credit for 117 …

Using historical data on postwar financial crises around the world, we show that the
combination of rapid credit and asset price growth over the prior three years, whether in the …

The purpose of this work is to investigate the influence of macroeconomics determinants on
non-performing loans (NPLs) in the Italian banking system over the period 2008Q3 …

In this paper, I begin by providing a brief survey of recent research that highlights some of
the key empirical facts about credit cycles. Next, I interpret these facts through a conceptual …

Reflexivity is the idea that investors' biased beliefs affect market outcomes, and that market
outcomes in turn affect investors' beliefs. We develop a behavioral model of the credit cycle …

We study mislearning from equilibrium prices, and contrast this with mislearning from
exogenous fundamentals. We micro-found mislearning from prices with a psychologically …

Using firm-level data for 42 countries over 1991-2016, we show that the extent to which
credit flows to relatively risker firms—which we label riskiness of credit allocation—is a …

Bank profitability leads the credit cycle. An increase in return on equity of the banking sector
predicts rising credit-to-GDP ratios in a panel of 17 advanced economies spanning the years …