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The Impact Of Credit Activity On The Economic Evolution Of The Developed Economies

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  • KLEJDA GABESHI

    (DOCTORAL SCHOOL OF ECONOMIC SCIENCES, UNIVERSITY OF CRAIOVA, ROMANIA / LOGOS UNIVERSITY, TIRANA, ALBANIA)

Abstract

Credit markets play a key role in the economic cycle of the advanced economies. The main objective of this paper is to assess, through an empirical analysis, if there is a link between the evolution of credit activity and economic growth in the current economic context. The econometric model used to determine the relationship between variables is that of multiple linear regression using a total of 120 panel observations for the years 2000-2019. A sample of data consisting of six developed countries such as Australia, France, Germany, Italy, Japan and the United Kingdom was used to make the following model. The dependent variable, which determines economic growth, is calculated as the annual percentage growth rate to GDP. The results of the econometric model showed that there is a statistically significant direct relationship between economic growth and the factors: bank credit to the private sector, the real interest rate and ROE. On the other hand, the results of the econometric model showed that there is a statistically significant indirect correlation between the dependent variable and the determinants of bank credit to government and public enterprises and non-performing loans.

Suggested Citation

  • Klejda Gabeshi, 2022. "The Impact Of Credit Activity On The Economic Evolution Of The Developed Economies," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 1, pages 185-190, February.
    • Handle: RePEc:cbu:jrnlec:y:2022:v:1:p:185-190
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    References listed on IDEAS

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    Cited by:

    1. Klejda Gabeshi, 2023. "The Causal Relationship Between Bank Credit For Real Estate And Economic Growth In Albania," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 1, pages 188-193, February.

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