Exploring the Steady-State Relationship Between Credit and GDP for a Small Open Economy–The Case Of Ireland
AbstractThe rapid increase in credit in an economy is now commonly perceived to be one of the leading indicators of financial instability. This view has been reinforced by the aftermath of the international financial crisis, which commenced in mid-2007. A key policy response has been to focus on the ratio of private sector credit to GDP for an economy, observing, in particular, significant deviations between the actual and long-run trends of the ratio. This paper examines the issue of the steady-state relationship between private sector credit and GDP in the case of Ireland, a country which, even by international standards, experienced a sizeable expansion in credit over the past 10 years.
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Bibliographic InfoArticle provided by Economic and Social Studies in its journal Economic and Social Review.
Volume (Year): 42 (2011)
Issue (Month): 4 ()
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Other versions of this item:
- Kelly, Robert & McQuinn, Kieran & Stuart, Rebecca, 2013. "Exploring the steady-state relationship between credit and GDP for a small open economy: the case of Ireland," Working Paper Series 1531, European Central Bank.
- Kelly, Robert & McQuinn, Kieran & Stuart, Rebecca, 2011. "Exploring the Steady-State Relationship between Credit and GDP for a Small Open Economy - The Case of Ireland," Research Technical Papers 1/RT/11, Central Bank of Ireland.
- G01 - Financial Economics - - General - - - Financial Crises
- E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
- E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
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