Credit Cycles, Global Liquidity and Monetary Regimes: An Approach for Latin America [Ciclos de crédito, liquidez global y regímenes monetarios: Una aproximación para América Latina]

With the latest financial crisis, interest in determining the role of the financial sector in the economy has revived. Within the literature that has addressed the issue, credit behavior has received special attention, given its strong association with events of financial crisis and periods of macroeconomic instability. This article concentrates on studying the behavior of credit cycles in Latin America, paying special attention to the existence of common factors in the behavior of these cycles and the association of these factors with the global liquidity conditions. The results reveal that about one-third of the credit cycle is explained by factors common to the countries under consideration, and that global liquidity shocks have effects on the credit cyclical common component in the region. © 2017, Universidad de los Andes, Facultad de Economia. All rights reserved.

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