The recent boom–bust cycle: The relative contribution of capital flows, credit supply and asset bubbles

Countercyclical capital rules for small open economies

“…This disaggregation means that, in addition to generating interest income, deposits also provide a liquidity service to the household (In't Veld et al, 2011). This additional feature allows us to replicate a precautionary motive for saving.…”

Current account dynamics and the housing cycle in Spain

“…A second prominent pull hypothesis are housing bubble shocks (see, e.g., In't Veld et al, 2011). Following Shiller (2005Shiller ( , 2007, a housing bubble is best described by a social pandemic, which is fueled by the belief of ever increasing house prices thereby raising the willingness to pay higher prices.…”

“…By initiating a domestic boom these factors, ultimately, attract capital inflows from the rest of the Eurozone. Prime candidates for this hypothesis are a relaxation of credit standards that foster credit supply by the banking industry (see, e.g., Helbling et al, 2011;Bassett et al, 2014) as well as housing bubble shocks that fuel markets against the backdrop in belief of ever surging house prices (see, e.g., Shiller, 2005Shiller, , 2007In't Veld et al, 2011).…”

International Capital Flows and the Boom-Bust Cycle in Spain

“…Other versions of that model have been estimated with US and with German data (in 't Veld et al (2011); ). The following presentation abstracts from adjustment costs (for labor and capital) and variable capital utilization rates assumed in the estimated model.…”