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......A third potential explanation is given through the perspective of boom and bust cycles in international capital markets. In this model, the boom phase is characterized by enthusiasm, which in some cases leads to unsustainable international lending. The bust phase characterizes the difficulties faced by countries, while meeting debt obligations. Boom and bust cycles have several potential reasons that generate them, such as: push factors changes in US interest rates may increase or decrease relative attractiveness of investment in other countries; pull factors macroeconomic policies developed by developing countries that stimulate capital flows in these countries. Capital inflows and outflows can be driven by both internal and external factors. The internal factors include the macroeconomic policies adopted by the authorities and the external ones refer to the international capital markets movements. The implications of booms and busts of capital flows can have devastating impacts on developing countries as they are depending on capital inflows, and this situation makes them vulnerable to unexpected shocks (Moreno, 2000). Moreno (2000) also concluded that although both investors and recipients gain from increased capital flows, the recipients are likely to be more vulnerable to sudden reversals
International lending is particularly challenging due to

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