The Interactions between Debt and Currency Crises – Common Causes or Contagion? In contrast to the well-known twin currency and banking crises the literature has so far neglected a second type of twin crises, the simultaneous occurrence of currency and debt crises. The decision of a government to devalue and/or to default is closely interlinked through the government’s intertemporal budget cons...

The Israeli government borrows internally and externally, and the Bank of Israel invests the foreign exchanges in various currencies. The borrowing interest rate is generally higher than the lending rate. In addition, the reserves are invested in relatively short-maturity safe assets, while borrowing is for relatively long maturities. This paper studies the structure of the government’s externa...

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 rev...