Abstract
Understanding the determinants of the magnitude and frequency of aggregate fluctuations is a central goal of macroeconomics. In this regard, the 2008 Financial Crisis awakened the attention of economists on the role that credit can play in generating, propagating, and amplifying shocks. Credit build-up during expansionary phases has been identified as a potential predictor of financial (and non-financial) crises. Furthermore, the severity of contractions is increasingly related to the high levels of credit in the economy. As a result, exploring the causes of crises implies exploring the determinants of credit accumulation and its impact on the economic system. This thesis sits in this literature as it investigates how the credit market structure of a country can influence the impact of different shocks on key business cycle moments, and it assesses whether income inequalities can affect credit dynamics. Lastly, it studies the often-overlooked role that fiscal policy might have in mitigating turbulences originated in the banking and financial systems.