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The Effect of Pandemics on Domestic Credit: A Cross-country Analysis

Author

Listed:
  • Gamze Ozturk Danisman

    (Kadir Has University)

  • Ender Demir

    (Istanbul Medeniyet University)

Abstract

Using a panel of 140 countries covering the period 1996-2018, this paper examines how previous pandemics (such as SARS, MERS, Ebola, Swine flu, etc.) have influenced the lending behavior of banks. We take advantage of a new index developed by Ahir et al. (2020) which measures discussions about pandemics at the country level. Our findings reveal that uncertainty related to pandemics significantly hamper domestic credit available to the private sector. The negative effect of pandemics on credit levels is more prevalent for the low-income & emerging economies and non-OECD countries.

Suggested Citation

  • Gamze Ozturk Danisman & Ender Demir, 2021. "The Effect of Pandemics on Domestic Credit: A Cross-country Analysis," Economics Bulletin, AccessEcon, vol. 41(2), pages 444-456.
    • Handle: RePEc:ebl:ecbull:eb-20-00748
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    References listed on IDEAS

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    More about this item

    Keywords

    Domestic Credit; Pandemics; COVID-19; Bank lending; Panel data;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • I1 - Health, Education, and Welfare - - Health

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