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Are bank loans important for output growth?

  • Rondorf, Ulrike
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    This paper investigates whether changes in the volume of supplied bank loans have a significant effect on output growth in the euro area. After the significance of the bank lending channel is established, money demand shocks are used as an instrumental variable for loans, following Driscoll (2004). With the application of a cross-country panel estimation, the impact of a change in loan supply on output growth is tested. In contrast to the United States, there is evidence that fluctuations in loans lead to a response in output in the euro area, supporting the credit view.

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    File URL: http://www.sciencedirect.com/science/article/pii/S1042443111000485
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    Article provided by Elsevier in its journal Journal of International Financial Markets, Institutions and Money.

    Volume (Year): 22 (2012)
    Issue (Month): 1 ()
    Pages: 103-119

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    Handle: RePEc:eee:intfin:v:22:y:2012:i:1:p:103-119
    Contact details of provider: Web page: http://www.elsevier.com/locate/intfin

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    1. Altunbas, Yener & Gambacorta, Leonardo & Marqués-Ibáñez, David, 2007. "Securitisation and the bank lending channel," Working Paper Series 0838, European Central Bank.
    2. Joe Peek & Eric S. Rosengren & Geoffrey M. B. Tootell, 2000. "Identifying the macroeconomic effect of loan supply shocks," Working Papers 00-2, Federal Reserve Bank of Boston.
    3. Garretsen, Harry & Swank, Job, 1998. "The Transmission of Interest Rate Changes and the Role of Bank Balance Sheets: A VAR-Analysis for the Netherlands," Journal of Macroeconomics, Elsevier, vol. 20(2), pages 325-339, April.
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    7. Casey B. Mulligan & Xavier Sala-I-Martin, 1992. "U.S. Money Demand: Surprising Cross-Sectional Estimates," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(2), pages 285-343.
    8. Jeremy C. Stein & Anil K. Kashyap, 2000. "What Do a Million Observations on Banks Say about the Transmission of Monetary Policy?," American Economic Review, American Economic Association, vol. 90(3), pages 407-428, June.
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    15. Jean-Paul Pollin & Raphaëlle Bellando, 1996. "Le canal du crédit en France depuis la déréglementation financière : quelques tests exploratoires," Revue Économique, Programme National Persée, vol. 47(3), pages 731-743.
    16. Burton A. Abrams & Margaret Z. Clarke & Russell F. Settle, 2003. "Do Banks Matter? A Credit View Model for Small Open Economies," Working Papers 03-13, University of Delaware, Department of Economics.
    17. Oliver Hülsewig & Peter Winker & Andreas Worms, 2004. "Bank Lending and Monetary Policy Transmission: A VECM Analysis for Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 224(5), pages 511-529, September.
    18. Fernando Barran & Benoît Mojon & Virginie Coudert, 1995. "Transmission de la politique monétaire et crédit bancaire. Une application à trois pays de l'OCDE," Revue Économique, Programme National Persée, vol. 46(2), pages 393-413.
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