Financial crises, credit booms and sovereign problems

Abstract

In this dissertation I review the literature on the major types of financial crises –currency crises, debt crises, sudden stops and banking crises- and I highlight how money and credit are associated with financial crises episodes from a historical perspective. Next, I discuss the interaction of private and public sector, focusing on why they should not be studied separately and I summarize the main facts and lessons from the literature. Moreover, I present a VAR model in order to test whether there is a causal relationship between bond spreads and lending spreads, in the case of Eurozone.