Disaggregated Credit Flows and Growth in Central Europe
AbstractThe aim of this paper is to explore the link between credit and output in the context of a developed transition economy. Salient credit market features of these economies are (i) credit market imperfections leading to constraints on growth and (ii) the rapidly growing importance during transition of their financial sectors (the insurance, pension funds and real estate sectors). We develop a framework of credit and output including separate measures for credit to the real sector and financial sectors and for credit constraints, taking account of the role of trade credit. In our empirical work we focus on the Czech Republic because of the level of its financial development and data quality. In VAR and ARIMA analyses we find that our disaggregated measures for credit flows are better predictors of nominal growth than traditional, aggregate measures.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 17456.
Date of creation: May 2009
Date of revision:
Credit; growth; transition; central Europe; Czech Republic;
Find related papers by JEL classification:
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-09-26 (All new papers)
- NEP-FDG-2009-09-26 (Financial Development & Growth)
- NEP-MAC-2009-09-26 (Macroeconomics)
- NEP-TRA-2009-09-26 (Transition Economics)
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