Credit has grown at a rapid pace in emerging markets (EMs) over the last 10 years. Banks have played a major role in the extension of credit and have continued to be its main source. Domestic banks have taken over business from foreign banks since 2008. However, developments across EMEs have...

In this paper we analyse how fiscal policy has affected monetary policy in the emerging market economies (EMEs). We find that most EMEs have pursued countercyclical fiscal and monetary policy over the past decade, with little evidence of fiscal dominance, in contrast to earlier periods. Our...

We find that declining bank credit to the private sector will not necessarily constrain the economic recovery after output has bottomed out following a financial crisis. To obtain this result, we examine data from 39 financial crises, which -- as the current one -- were preceded by credit booms....

The paper shows how tax rate cuts can increase revenues by improving tax compliance. The intuition is that tax evasion has externalities: tax evaders protect each other, because they tie down limited enforcement capacity. Thus, relatively small tax rate cuts, which decrease incentives to evade...

Several countries are concurrently experiencing historically low inflation rates and ageing populations. Is there a connection, as recently suggested by some senior central bankers? We undertake a comprehensive test of this hypothesis in a panel of 22 countries over the 1955-2010 period. We find...