A cross-country financial accelerator: Evidence from North America and Europe

Ashoka Mody, Lucio Sarno, Mark P. Taylor

Research output: Contribution to journalArticlepeer-review

5 Scopus citations


A growing literature has examined the importance of credit-market imperfections for macroeconomic fluctuations, the so-called 'financial accelerator.' A related literature has provided evidence of international and regional comovements in macroeconomic fluctuations. We tie together these strands of the literature in that we investigate the importance of both cross-country and country-specific credit cycles in explaining output fluctuations. Using data for four major economies and two world regions from 1973 to 2001, we find that both regional and country-specific components of indicators of credit availability are powerful in explaining output movements. This research provides the first empirical evidence of a cross-country financial accelerator.

Original languageEnglish (US)
Pages (from-to)149-165
Number of pages17
JournalJournal of International Money and Finance
Issue number1
StatePublished - Feb 2007
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics


  • Credit cycle
  • Financial accelerator
  • International business cycles
  • Kalman filter


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