Using Credit Subsidies to Counteract a Credit Bust : Evidence From Serbia

WPIEA2011285 Image
Price:  $18.00

Author/Editor: Jiri Podpiera
Release Date: © December, 2011
ISBN : 978-1-46392-719-6
Stock #: WPIEA2011285
English
Stock Status: On back-order

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Description

Emerging markets are particularly vulnerable to boom-bust credit cycles, due to excessive capital flows, shallow equity markets, and companies'' high leverage and open FX positions. While the policy debate on how to respond to boom-bust credit cycles remains unsettled, it has been conjectured that credit subsidies may provide a particularly effective policy tool to counter a credit bust. This paper reports on a rare policy experiment where credit subsidies were used to buffer the impact of the global financial crisis on Serbia in 2009. Model simulations suggest that credit subsidies in Serbia helped to mitigate the slump in output.

Taxonomy

Business cycles , Economic development




More publications in this series: Working Papers


More publications by: Jiri Podpiera