| This dissertation contributes to the understanding of the boom-bust cycles in the Peruvian economy during the last fifty years, in particular, during periods of financial liberalization. This research presents evidence and discusses the causes of the boom-bust crisis in the recent history of Peru. Additionally, this study reveals that there are credit market imperfections that allow for the existence of a credit channel for the transmission of economic shocks. Additionally, in accordance with the theoretical developments in the field, this work discovers that small firms, non-financial sector firms and small banks (from an international point of view) face borrowing constraints which contribute to magnify the shocks on the economy. The identification of this finding, which is one of the main contributions in this research, required putting together a database formed by the financial statements of 4007 firms representative from all sectors in the economy, 17 banks and 122 non-financial companies listed in the Peruvian Stock Exchange, for a period of nine years characterized by financial liberalization. |
