US credit constraints heighten global propagation of financial shocks, researchers argue
Normal credit conditions in US economy greatly lessen global impact of financial shocks, paper says
Financial shocks in the US are much more significant for the global economy when credit in the US domestic economy is constrained, a working paper published by the European Central Bank argues.
In Credit constraints and the international propagation of US financial shocks, Norbert Metiu, Björn Hilberg and Michael Grill investigate whether "credit constraints in the US economy amplify the international propagation of US financial shocks".
The authors use a threshold vector autoregression model
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