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The Influence of Lending Activity on Economic Growth in Romania

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  • Cătălin Emilian HUIDUMAC PETRESCU

    (Bucharest University of Economic Studies, Romania)

  • Alina POP

    (Bucharest University of Economic Studies, Romania)

Abstract

The banking system has the role to eliminate the fund deficit by transferring the capital towards investments in order to support the economic growth. Economic development it is possible if there is an adequate level of capital in the economy that will ensure efficient business conditions. Credit expansion allows consumers to borrow and spend more and businesses to borrow and invest more. Increasing consumption and investment creates jobs and expands income and profits. The study aims to analyze the impact that the banking system loans have on economic growth in Romania. The analysis involves a regression model where economic growth will be measured by the growth domestic product, considered the dependent variable and loans, interest rates and inflation, the independent variables.

Suggested Citation

  • Cătălin Emilian HUIDUMAC PETRESCU & Alina POP, 2015. "The Influence of Lending Activity on Economic Growth in Romania," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(4(605), W), pages 229-236, Winter.
  • Handle: RePEc:agr:journl:v:xxii:y:2015:i:4(605):p:229-236
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    References listed on IDEAS

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    1. Frederic S. Mishkin, 1997. "The causes and propagation of financial instability : lessons for policy makers," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 55-96.
    2. Dirk Bezemer, 2014. "Schumpeter might be right again: the functional differentiation of credit," Journal of Evolutionary Economics, Springer, vol. 24(5), pages 935-950, November.
    3. 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.
    4. Mohsin S. Khan & Abdelhak S Senhadji, 2000. "Financial Development and Economic Growth; An Overview," IMF Working Papers 00/209, International Monetary Fund.
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    More about this item

    Keywords

    credit; economic growth; inflation; interest rate.;

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