The sudden stops of debt‐led capital inflows, credit crunch, and exchange rate regimes

Abstract

The Fed terminated the third round of quantitative easing in November 2014. Only one year later in December 2015, it announced the end of its seven-year-long zero-interest-rate policy and immediately raised short-term rates by 25 basis points, a monetary policy shift from extreme easing that had not been seen over the last decade. Up until the middle of 2019 the Fed had launched nine rounds of shortterm rate rises and shrunk its balance sheet, as a result of which the effective federal funds rate reached 2.4% in July 2019. This was the prelude to sudden stops of capital inflows into emerging markets. The potential macroeconomic impacts of such capital flows on developing countries have again become an interesting and relevant topic.

Credit Crunch and Monetary Policy During Covid-19 Pandemic

“…Meanwhile, some other researchers emphasize that credit crunch occurs due to crises and abnormal situations that result in a decrease in credit supply stemming from the reluctance of banking institutions to lend regardless of interest rate conditions (Barney & Souksakoun, 2021;Bernanke & Lown, 1991;Pazarbaşioǧlu, 1997). Credit crunch can also come from reduced domestic capital flows from foreign loans, which also has an impact on domestic credit flows (Guo et al, 2021). Agung et al (2001) further emphasized that the credit crunch caused a sharp decline in credit growth as a result of the limited credit provided by banks (excess demand).…”

Permasalahan Credit Crunch Perbankan Syariah Di Indonesia Ditinjau Dari Tawhidi String Relation

“…Kajian mengenai credit crunch sudah pernah dilakukan oleh para peneliti baik nasional maupun internasional, diantaranya yaitu Buera and Nicolini (2020); Darmouni (2020); Grilli, Tedeschi, and Gallegati (2020); Kim (2020); Mamatzakis and Staikouras (2020); Awdeh and El-Moussawi (2021); Bach, Le, and Bui (2021); Barney and Souksakoun (2021); Baubeau et al (2021); Girardi and Ventura (2021); Guo, Li, and Li (2021); Kurniawati and Halisa (2021); Margono (2021); Pyka and Pyka (2021); Apritchzeki and Purwitasari (2022); Kartika, Lestari, and Madyasari (2022); Septiavin et al (2022) , dengan metode dan hasil yang beragam. Namun dari semua kajian tersebut belum ada yang membahas credit crunch dari segi Tawhidi String Relation.…”