External debt composition and domestic credit cycles

We investigate the empirical link between external debt composition and domestic credit cycles. Using quarterly data for 40 countries 1980 2015, we show that two dimensions of (ie instrument type lending/borrowing sector) provide valuable information about likelihood booms busts. In particular, find a higher share bank lending in form bonds is associated with greater booms. Our results also reveal busts tend to be lower interbank from banks non-banks. Additionally, evidence shows robust predictor at wide range horizons. Thus, contained can used construct set “early-warning” indicators, which help policymakers their management