IDEAS home Printed from https://ideas.repec.org/p/hnb/wpaper/45.html

Delayed Credit Recovery in Croatia:Supply or Demand Driven?

Author

Listed:
  • Mirna Dumičić

    (The Croatian National Bank, Croatia)

  • Igor Ljubaj

    (The Croatian National Bank, Croatia)

Abstract

In order to enhance the understanding of credit cycle dynamics in Croatia we explore the evolution of credit demand and credit supply of corporates and households in Croatia and identify their determinants based on the switching regression framework. These results are crosschecked by the insights from the bank lending survey. The conducted analysis shows there are both supply and demand-side factors that limit the possibility of intensifying household and corporate credit activity. However, a more pronounced drag seems to be coming from subdued demand, which is greatly influenced by the unfavourable domestic macroeconomic environment and particularly GDP developments. This suggests that it is not unusual that credit recovery is still missing, but also confirms that the scope for monetary policy to stimulate lending is limited.

Suggested Citation

  • Mirna Dumičić & Igor Ljubaj, 2017. "Delayed Credit Recovery in Croatia:Supply or Demand Driven?," Working Papers 45, The Croatian National Bank, Croatia.
    • Handle: RePEc:hnb:wpaper:45
    as

    Download full text from publisher

    File URL: http://www.hnb.hr/repec/hnb/wpaper/pdf/w-045.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Maddala, G S & Nelson, Forrest D, 1974. "Maximum Likelihood Methods for Models of Markets in Disequilibrium," Econometrica, Econometric Society, vol. 42(6), pages 1013-1030, November.
    2. Mr. Atish R. Ghosh & Swart R. Ghosh, 1999. "East Asia in the Aftermath: Was there a Crunch?," IMF Working Papers 1999/038, International Monetary Fund.
    3. Nada Oulidi & Laurence Allain, 2009. "Credit Market in Morocco: A Disequilibrium Approach," IMF Working Papers 2009/053, International Monetary Fund.
    4. Igor Ljubaj, 2012. "Estimating the Impact of Monetary Policy on Household and Corporate Loans: a FAVEC Approach," Working Papers 34, The Croatian National Bank, Croatia.
    5. Nehls, Hiltrud & Schmidt, Torsten, 2003. "Credit Crunch in Germany?," RWI Discussion Papers 6, RWI - Leibniz-Institut für Wirtschaftsforschung.
    6. Torsten Schmidt & Hiltrud Nehls, 2003. "Credit Crunch in Germany?," RWI Discussion Papers 0006, Rheinisch-Westfälisches Institut für Wirtschaftsforschung.
    7. Greetje Everaert & Ms. Natasha X Che & Ms. Nan Geng & Bertrand Gruss & Gregorio Impavido & Miss Yinqiu Lu & Christian Saborowski & Mr. Jerome Vandenbussche & Mr. Li Zeng, 2015. "Does Supply or Demand Drive the Credit Cycle? Evidence from Central, Eastern, and Southeastern Europe," IMF Working Papers 2015/015, International Monetary Fund.
    8. Ana Maria Čeh & Mirna Dumičić & Ivo Krznar, 2011. "A Credit Market Disequilibrium Model And Periods of Credit Crunch," Working Papers 28, The Croatian National Bank, Croatia.
    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. Karmelavičius, Jaunius & Mikaliūnaitė-Jouvanceau, Ieva & Petrokaitė, Austėja Petrokaitė, 2022. "Housing and credit misalignments in a two-market disequilibrium framework," ESRB Working Paper Series 135, European Systemic Risk Board.
    2. Bofinger, Peter & Maas, Daniel & Ries, Mathias, 2017. "A model of the market for bank credit: The case of Germany," W.E.P. - Würzburg Economic Papers 98, University of Würzburg, Department of Economics.
    3. Nada Oulidi & Laurence Allain, 2009. "Credit Market in Morocco: A Disequilibrium Approach," IMF Working Papers 2009/053, International Monetary Fund.
    4. Petr Korab & Jitka Pomenkova, 2017. "Credit Rationing in Greece During and After the Financial Crisis," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 67(2), pages 119-139, April.
    5. Jameel Ahmed, 2016. "Credit Conditions in Pakistan: Supply Constraints or Demand Deficiencies?," The Developing Economies, Institute of Developing Economies, vol. 54(2), pages 139-161, June.
    6. Ramirez, Francisco A., 2012. "Crédito Al Sector Privado En República Dominicana (1997-2011): ¿Existe Evidencia De Racionamiento Del Crédito? [Private Sector Loans in the Dominican Republic (1997-2011):Is There Evidence of credit rationing?]," MPRA Paper 68333, University Library of Munich, Germany.
    7. Saurabh Ghosh & Snehal Herwadkar & Radheshyam Verma & Pawan Gopalakrishnan, 2023. "Disentangling demand and supply side determinants of post-GFC credit slowdown: an Indian perspective," Indian Economic Review, Springer, vol. 58(2), pages 399-421, September.
    8. Didarul Islam, 2022. "Determinants of Domestic Bank Credit to Private sectors in Bangladesh: An Empirical Investigation," Journal of Economic Impact, Science Impact Publishers, vol. 4(2), pages 65-74.
    9. Nikolai Lazarov, 2022. "Evaluation of the factors influencing household lending in Bulgaria," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 221-238.
    10. Tamini, Arnaud & Petey, Joël, 2021. "Hoarding of reserves in the banking industry: Explaining the African paradox," The Quarterly Review of Economics and Finance, Elsevier, vol. 81(C), pages 214-225.
    11. Andrés Murcia Pabón, 2007. "Determinantes del acceso al crédito de los hogares colombianos," Revista ESPE - Ensayos Sobre Política Económica, Banco de la República, vol. 25(55), pages 40-83.
    12. Poghosyan, Tigran, 2011. "Slowdown of credit flows in Jordan in the wake of the global financial crisis: Supply or demand driven?," Economic Systems, Elsevier, vol. 35(4), pages 562-573.
    13. Shijaku, Gerti & Kalluci, Irini, 2013. "Determinants of bank credit to the private sector: The case of Albania," MPRA Paper 79092, University Library of Munich, Germany.
    14. Amat Adarov & Richard Grieveson & Mario Holzner & Olga Pindyuk & Hermine Vidovic, 2019. "Unsecured Lending in Central and Southeast Europe," wiiw Market Report 1, The Vienna Institute for International Economic Studies, wiiw.
    15. Mathinee Subhaswasdikul & Don Nakornthab, 2003. "Banking Sector Fundamentals: Learning from the Recent Bank Lending Contraction," Working Papers 2003-11, Monetary Policy Group, Bank of Thailand.
    16. Adolfo Barajas & Enrique López & Hugo Oliveros, 2001. "¿Por qué en Colombia el Crédito al Sector Privado es tan Reducido," Borradores de Economia 185, Banco de la Republica de Colombia.
    17. Eric Wong & Andrew Tsang & Steven Kong, 2016. "How Does Loan-To-Value Policy Strengthen Resilience of Banks to Property Price Shocks - Evidence from Hong Kong," International Real Estate Review, Global Social Science Institute, vol. 19(1), pages 120-149.
    18. Panicos O. Demetriades & Bassam Fattouh, 2006. "Excess Credit and the South Korean Crisis," WIDER Working Paper Series RP2006-84, World Institute for Development Economic Research (UNU-WIDER).
    19. Claessens, Stijn & Sakho, Yaye Seynabou, 2013. "Assessing firms'financing constraints in Brazil," Policy Research Working Paper Series 6624, The World Bank.
    20. Cristian-Florin Dănănău, 2015. "A Disequilibrium Model For Lei-Denominated Non-Governmental Credit In Romania," SEA - Practical Application of Science, Romanian Foundation for Business Intelligence, Editorial Department, issue 7, pages 207-214, April.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:hnb:wpaper:45. 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: Romana Sinković (email available below). General contact details of provider: https://www.hnb.hr .

    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.