Some of the most visible causes for booms and busts in a small, open, financially developing economy include a fragile financial market, exchange rate shocks, and asset price volatility that often result in credit constraints. Because these shocks tend to exaggerate the credit cycles of...

One of the most visible causes for booms and busts in emerging economies is financial market friction. Some of the features of a small, open, financially developing economy include a fragile financial market, exchange rate shocks, and asset price volatility that often result in credit...

In Korea, growing household debts are threatening to precipitate a balance sheet recession that is hard to address with macroeconomic policies, similar to what transpired in Japan. The household debt-to-GDP ratio climbed to a significantly high level, and the debt structure is vulnerable to both...