This paper highlights the findings of some of the recent research on capital flows, credit booms, and their attendant consequences for asset prices, business cycles, financial crises and the interaction among these. The aim is to condense key results from the relevant literature and promote...

Protracted expansionary monetary policies in advanced countries have renewed the debate over policy options to cope with large capital inflows that drive credit expansions in emerging economies. In a forthcoming paper, we show that during capital inflow bonanzas credit grows more rapidly and its...

The preceding sections have predominantly focused on the antecedents of financial crises. Namely, the emphasis has been on the ability of a variety of indicators, including the credit ratings, to anticipate crises and characterize the extent to which a country is vulnerable. An application of...

The signals approach was applied to 24 of the indicators around the dates of the 29 banking and the 87 currency crises. In what follows, we first compare our results for the 15 original indicators in Kaminsky and Reinhart (1996) to those presented in that study. This exercise assesses the...