This paper examines the role of external debt financing (EDF) in shaping the credit cycles and the joint implications of EDF flows and credit growth for the output volatility in ten major emerging economies. We find that extreme phases—known as surge and stop episodes—in EDF flows are significantly associated with credit surges and stop episodes as shown by a panel multinominal logit estimation. However, the association is asymmetric—EDF stop episodes are more likely to bring about a credit stop episode compared to the occurrence of credit surges due to EDF surges. The results suggest vulnerabilities of credit cycles of EMEs to the sharp movement in EDF flows which in turn is typically synchronized with global liquidity conditions. In the second part of our analysis, using the bias-corrected LSDV estimation for the dynamic panels, we find that EDF flows and credit jointly have a strong amplifying impact on the output volatility. Moreover, EMEs also face large output volatility when EDF stop and credit stop episodes occur together. The results implicate a broader welfare loss in the form of output fluctuations due to a strong synchronization between external debt financing and domestic credit conditions. Significant output fluctuations are also a cause of concern for policymakers in EMEs who seek to insulate their economies from external and domestic financial shocks.

本文研究了外债融资 (EDF) 在塑造信贷周期方面的作用，以及 EDF 流动和信贷增长对 10 个主要新兴经济体产出波动的联合影响。我们发现 EDF 流动中的极端阶段（称为激增和停止事件）与信贷激增和停止事件显着相关，如面板多项 logit 估计所示。然而，这种关联是不对称的——与 EDF 激增导致的信用激增相比，EDF 停止事件更可能导致信用停止事件。结果表明，新兴市场经济体的信贷周期容易受到 EDF 流量急剧变动的影响，而后者通常与全球流动性状况同步。在我们分析的第二部分，对动态面板使用偏差校正的 LSDV 估计，我们发现 EDF 流量和信贷共同对产出波动有很强的放大影响。此外，当 EDF 停止和信用停止事件同时发生时，新兴市场经济体也面临巨大的产出波动。结果表明，由于外债融资与国内信贷条件之间的强烈同步，以产出波动的形式出现了更广泛的福利损失。显着的产出波动也是新兴市场经济体政策制定者担心的一个原因，他们寻求使经济免受国内外金融冲击的影响。结果表明，由于外债融资与国内信贷条件之间的强烈同步，以产出波动的形式出现了更广泛的福利损失。显着的产出波动也是新兴市场经济体政策制定者关注的一个原因，他们寻求使经济免受国内外金融冲击的影响。结果表明，由于外债融资与国内信贷条件之间的强烈同步，以产出波动的形式出现了更广泛的福利损失。显着的产出波动也是新兴市场经济体政策制定者关注的一个原因，他们寻求使经济免受国内外金融冲击的影响。