This paper incorporates a global bank into a two-country business cycle model. The bank
collects deposits from households and makes loans to entrepreneurs, in both countries. It …

This paper examines the importance of credit market shocks in driving global business
cycles over the period 1988: 1–2009: 4. We first estimate common components in various …

We provide a theory of the determination of exchange rates based on capital flows in
imperfect financial markets. Capital flows drive exchange rates by altering the balance …

The US Great Recession featured a large decline in output and labor, tighter financial
conditions, and a large increase in firm growth dispersion. We build a model in which …

This article incorporates banks and banking panics within a conventional macroeconomic
framework to analyse the dynamics of a financial crisis of the kind recently experienced. We …

The world economy has experienced four global recessions over the past seven decades: in
1975, 1982, 1991, and 2009. During each of these episodes, annual real per capita global …

Collateral constraints widely used in models of financial crises feature a pecuniary
externality: Agents do not internalize how borrowing decisions made in “good times” affect …

Banking crises are rare events that break out in the midst of credit-intensive booms and
bring about deep and long-lasting recessions. This paper presents a textbook dynamic …

We study the effect of financial integration (through banks) on the transmission of
international business cycles. In a sample of 18/20 developed countries between 1978 and …

We analyze the impact of financial globalization on business cycle synchronization using a
proprietary database on banks' international exposure for industrialized countries during …