Are bank loans important for output growth?
AbstractThis paper investigates whether changes in the volume of supplied bank loans have a significant effect on output growth in the euro area. After the significance of the bank lending channel is established, money demand shocks are used as an instrumental variable for loans, following Driscoll (2004). With the application of a cross-country panel estimation, the impact of a change in loan supply on output growth is tested. In contrast to the United States, there is evidence that fluctuations in loans lead to a response in output in the euro area, supporting the credit view.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of International Financial Markets, Institutions and Money.
Volume (Year): 22 (2012)
Issue (Month): 1 ()
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Web page: http://www.elsevier.com/locate/intfin
Bank lending channel; Monetary policy transmission; Credit view; Cross-country analysis; Euro area;
Find related papers by JEL classification:
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
- E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
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