Monetary Policy and Financial Markets

[ Ph.D Andreas Kern ]

[ Compas ]

[ TA-Project ]

Outline

The research project aims to explain how credit booms emerge and to identify critical variables and mechanisms driving a rapid expansion in private lending in emerging market economies. Starting from a micro perspective concentrating on the lending behaviour of banks in emerging markets, the second stage of the thesis will link political variables to the phenomenon of rapid credit expansions in emerging market economies. Although a large body of economic literature exists on explaining lending booms from a pure economic perspective, the project aims to identify key political and economic actors, investigate their preferences and to determine institutional constraints determining the behaviour of market participants, driving policy and market outcomes. This way of investigating the occurrence of lending booms in emerging market economies is aimed to deliver new insights to the political and economic literature on the roots of financial crises from a political perspective and shed light on effective prevention measures beyond well known economic prescriptions.