IDEAS home Printed from https://ideas.repec.org/a/pfq/journl/v64y2019i4p455-470.html
   My bibliography  Save this article

An Empirical Analysis of the Relationship between Economic Growth and Credit Volumes in Hungary

Author

Listed:
  • Varga, József
  • Temuulen, Elbegdorj
  • Bareith, Tibor

Abstract

Our research focuses on the impact of the private sector’s credit volume on economic growth. The main purpose of our study is to present the theoretical background between lending activity and economic growth, which is empirically tested for Hungary in 2000-2017. We have used the Vector Autoregression model, where the dependent variable is a linear function of past lags of itself and past lags of the other involved variables. We have identified a significant relationship between private sector credit and general government debt and the pace of economic growth. Based on our empirical research, the base effect, Germany’s economic growth and recession were significant variables.

Suggested Citation

  • Varga, József & Temuulen, Elbegdorj & Bareith, Tibor, 2019. "An Empirical Analysis of the Relationship between Economic Growth and Credit Volumes in Hungary," Public Finance Quarterly, Corvinus University of Budapest, vol. 64(4), pages 455-470.
    • Handle: RePEc:pfq:journl:v:64:y:2019:i:4:p:455-470
    DOI: https://doi.org/10.35551/PFQ_2019_4_1
    as

    Download full text from publisher

    File URL: https://unipub.lib.uni-corvinus.hu/8677/
    Download Restriction: no
    File URL: https://libkey.io/https://doi.org/10.35551/PFQ_2019_4_1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Pierre-Olivier Gourinchas & Rodrigo Valdes & Oscar Landerretche, 2001. "Lending Booms: Latin America and the World," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Spring 20), pages 47-100, January.
    2. Jean Arcand & Enrico Berkes & Ugo Panizza, 2015. "Too much finance?," Journal of Economic Growth, Springer, vol. 20(2), pages 105-148, June.
    3. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 407-443.
    4. Rousseau, Peter L & Wachtel, Paul, 1998. "Financial Intermediation and Economic Performance: Historical Evidence from Five Industrialized Countries," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 30(4), pages 657-678, November.
    5. Robert G. King & Ross Levine, 1993. "Finance and Growth: Schumpeter Might Be Right," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(3), pages 717-737.
    6. Peter L. Rousseau & Richard Sylla, 2003. "Financial Systems, Economic Growth, and Globalization," NBER Chapters, in: Globalization in Historical Perspective, pages 373-416, National Bureau of Economic Research, Inc.
    7. William R. Keeton, 1999. "Does faster loan growth lead to higher loan losses?," Economic Review, Federal Reserve Bank of Kansas City, vol. 84(Q II), pages 57-75.
    8. Katalin Bodnár & Zsolt Kovalszky & Emese Hudák, 2014. "Recovery from crises and lending," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 13(4), pages 57-85.
    9. Law, Siong Hook & Singh, Nirvikar, 2014. "Does too much finance harm economic growth?," Journal of Banking & Finance, Elsevier, vol. 41(C), pages 36-44.
    10. Levine, Ross, 2005. "Finance and Growth: Theory and Evidence," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 12, pages 865-934, Elsevier.
    11. Asli Demeirgüç-Kunt & Ross Levine (ed.), 0. "Finance and Growth," Books, Edward Elgar Publishing, number 17119.
    12. Hicks, J. R., 1969. "A Theory of Economic History," OUP Catalogue, Oxford University Press, number 9780198811633.
    13. Alwyn Young, 1995. "The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(3), pages 641-680.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Samargandi, Nahla & Fidrmuc, Jan & Ghosh, Sugata, 2015. "Is the Relationship Between Financial Development and Economic Growth Monotonic? Evidence from a Sample of Middle-Income Countries," World Development, Elsevier, vol. 68(C), pages 66-81.
    2. Marc Steffen Rapp & Iuliia A. Udoieva, 2018. "What matters in the finance–growth nexus of advanced economies? Evidence from OECD countries," Applied Economics, Taylor & Francis Journals, vol. 50(6), pages 676-690, February.
    3. Paul Wachtel, 2018. "Credit Deepening: Precursor to Growth or Crisis?," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 60(1), pages 34-43, March.
    4. Gründler, Klaus & Weitzel, Jan, 2013. "The financial sector and economic growth in a panel of countries," Discussion Paper Series 123, Julius Maximilian University of Würzburg, Chair of Economic Order and Social Policy.
    5. Rosa Capolupo, 2018. "Finance, Investment and Growth: Evidence for Italy," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 47(1), pages 145-186, February.
    6. Ng, Adam & Dewandaru, Ginanjar & Ibrahim, Mansor H., 2015. "Property rights and the stock market-growth nexus," The North American Journal of Economics and Finance, Elsevier, vol. 32(C), pages 48-63.
    7. James B. Ang, 2008. "A Survey Of Recent Developments In The Literature Of Finance And Growth," Journal of Economic Surveys, Wiley Blackwell, vol. 22(3), pages 536-576, July.
    8. Giorgio Fagiolo & Daniele Giachini & Andrea Roventini, 2020. "Innovation, finance, and economic growth: an agent-based approach," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 15(3), pages 703-736, July.
    9. Małgorzata Iwanicz-Drozdowska & Paola Bongini & Paweł Smaga & Bartosz Witkowski, 2019. "The role of banks in CESEE countries: exploring non-standard determinants of economic growth," Post-Communist Economies, Taylor & Francis Journals, vol. 31(3), pages 349-382, May.
    10. Emmanuel Carré & Guillaume L’œillet, 2018. "The Literature on the Finance–Growth Nexus in the Aftermath of the Financial Crisis: A Review," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 60(1), pages 161-180, March.
    11. Silva, Sergio H.R. da & Tabak, Benjamin M. & Cajueiro, Daniel O. & Fazio, Dimas M., 2017. "Economic growth, volatility and their interaction: What’s the role of finance?," Economic Systems, Elsevier, vol. 41(3), pages 433-444.
    12. Emanuele Ciola, 2020. "Financial sector bargaining power, aggregate growth and systemic risk," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 15(1), pages 89-109, January.
    13. Boris Cournède & Oliver Denk & Peter Hoeller, 2015. "Finance and Inclusive Growth," OECD Economic Policy Papers 14, OECD Publishing.
    14. Ugo Panizza, 2018. "Nonlinearities in the Relationship Between Finance and Growth," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 60(1), pages 44-53, March.
    15. Alberto Bucci & Simone Marsiglio, 2019. "Financial development and economic growth: long‐run equilibrium and transitional dynamics," Scottish Journal of Political Economy, Scottish Economic Society, vol. 66(3), pages 331-359, July.
    16. Kizito Uyi Ehigiamusoe & Mohamad Shaharudin Samsurijan, 2021. "What matters for finance‐growth nexus? A critical survey of macroeconomic stability, institutions, financial and economic development," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 5302-5320, October.
    17. Jean Arcand & Enrico Berkes & Ugo Panizza, 2015. "Too much finance?," Journal of Economic Growth, Springer, vol. 20(2), pages 105-148, June.
    18. Tori, Daniele & Onaran, Özlem, 2018. "Financialisation, financial development, and investment: evidence from European non-financial corporations," Greenwich Papers in Political Economy 22196, University of Greenwich, Greenwich Political Economy Research Centre.
    19. Bordo, Michael D. & Rousseau, Peter L., 2012. "Historical evidence on the finance-trade-growth nexus," Journal of Banking & Finance, Elsevier, vol. 36(4), pages 1236-1243.
    20. Samatas, Andreas & Makrominas, Michalis & Moro, Andrea, 2019. "Financial intermediation, capital composition and income stagnation: The case of Europe," Journal of Economic Behavior & Organization, Elsevier, vol. 162(C), pages 273-289.

    More about this item

    Keywords

    economic growth; lending; Hungary;
    All these keywords.

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G20 - Financial Economics - - Financial Institutions and Services - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pfq:journl:v:64:y:2019:i:4:p:455-470. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Adam Hoffmann (email available below). General contact details of provider: https://edirc.repec.org/data/bkeeehu.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.