Slowdown of Credit Flows in Jordan in the Wake of the Global Financial Crisis; Supply or Demand Driven?
This paper estimates a disequilibrium model of credit supply and demand to evaluate the relative role of these factors in the slowdown of credit flows in the Jordanian economy in the wake of the global financial crisis. The empirical analysis suggests that the credit stagnation is mainly driven by the restricted credit supply amid tighter monetary policy conditions in Jordan relative to the United States, as evidenced by the widened interest differential between the Central Bank of Jordan (CBJ) re-discount and the U.S. Federal Reserve funds rates. Although it appears that demand side factors related to the slowdown of economic activity have also had an impact, their role has been relatively modest. The estimation results imply that economic policies targeted towards stimulating supply of credit are likely to be a more effective tool for expanding credit flows relative to demand stimulating policies.
|Date of creation:||01 Nov 2010|
|Contact details of provider:|| Postal: International Monetary Fund, Washington, DC USA|
Phone: (202) 623-7000
Fax: (202) 623-4661
Web page: http://www.imf.org/external/pubind.htm
More information through EDIRC
|Order Information:||Web: http://www.imf.org/external/pubs/pubs/ord_info.htm|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Adolfo Barajas & Roberto Steiner, 2002. "Credit Stagnation in Latin America," IMF Working Papers 02/53, International Monetary Fund.
- Bernd Lucke, 2004. "Real Interest Rates and Productivity Shocks : Why Are Business Cycles Negatively Correlated Between the European Union and Jordan?," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 40(6), pages 82-94, November.
- Daras, Tomasz & Tyrowicz, Joanna, 2011.
"Breeding one's own sub-prime crisis: The labour market effects on financial system stability,"
Elsevier, vol. 35(2), pages 278-299, June.
- Seza Danisog¬Lu Rhoades & Z. Nuray Gãœner, 2003. "Economic Uncertainty and Credit Crunch : Evidence from an Emerging Market," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 39(4), pages 5-23, July.
- JÃ©rÃ´me Vandenbussche & Stanley B Watt & Szabolcs Blazsek, 2009. "The Liquidity and Liquidity Distribution Effects in Emerging Markets; The Case of Jordan," IMF Working Papers 09/228, International Monetary Fund.
- P.R. Agenor & J. Aizenman & A. Hoffmaister, 2000.
"The Credit Crunch in East Asia: What can Bank Excess Liquid Assets Tell us?,"
NBER Working Papers
7951, National Bureau of Economic Research, Inc.
- Agenor, Pierre-Richard & Aizenman, Joshua & Hoffmaister, Alexander W., 2004. "The credit crunch in East Asia: what can bank excess liquid assets tell us?," Journal of International Money and Finance, Elsevier, vol. 23(1), pages 27-49, February.
- Agenor, Pierre-Richard & Aizenman, Joshua & Hoffmaister, Alexander, 2000. "The credit crunch in East Asia : what can bank excess liquid assets tell us ?," Policy Research Working Paper Series 2483, The World Bank.
- Kim, Hyun E., 1999. "Was the credit channel a key monetary transmission mechanism following the recent financial crisis in the Republic of Korea?," Policy Research Working Paper Series 2103, The World Bank.
- Hurlin, Christophe & Kierzenkowski, Rafal, 2007.
"Credit market disequilibrium in Poland: Can we find what we expect?: Non-stationarity and the short-side rule,"
Elsevier, vol. 31(2), pages 157-183, June.
- Christophe Hurlin & R. Kierzenkowski, 2007. "Credit Market Disequilibrium in Poland: Can we find what we expect? Non stationarity and the Short Side Rule," Post-Print halshs-00257320, HAL.
- Dabrowski, Marek, 2010.
"The global financial crisis: Lessons for European integration,"
Elsevier, vol. 34(1), pages 38-54, March.
- Marek Dabrowski, 2009. "The Global Financial Crisis: Lessons for European Integration," CASE Network Studies and Analyses 0384, CASE-Center for Social and Economic Research.
- Atish R. Ghosh & Swart R. Ghosh, 1999.
"East Asia in the Aftermath; Was there a Crunch?,"
IMF Working Papers
99/38, International Monetary Fund.
- Laffont, Jean-Jacques & Garcia, Rene, 1977. "Disequilibrium Econometrics for Business Loans," Econometrica, Econometric Society, vol. 45(5), pages 1187-1204, July.
- Neyer, Ulrike, 2004. "Asymmetric information in credit markets--implications for the transition in Eastern Germany," Economic Systems, Elsevier, vol. 28(1), pages 61-78, March.
- Adolfo Barajas & Roberto Steiner, 2002. "Why Don't They Lend? Credit Stagnation in Latin America," IMF Staff Papers, Palgrave Macmillan, vol. 49(Special i), pages 156-184.
- Tarron Khemraj, 2010. "What does excess bank liquidity say about the loan market in Less Developed Countries?," Oxford Economic Papers, Oxford University Press, vol. 62(1), pages 86-113, January.
- Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
- Kenc, Turalay & Dibooglu, Sel, 2010. "The 2007-2009 financial crisis, global imbalances and capital flows: Implications for reform," Economic Systems, Elsevier, vol. 34(1), pages 3-21, March.
- 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.
- Tushar Poddar & Hasmik V Khachatryan & Randa Sab, 2006. "The Monetary Transmission Mechanism in Jordan," IMF Working Papers 06/48, International Monetary Fund.
- Ernst R. Berndt & Bronwyn H. Hall & Robert E. Hall & Jerry A. Hausman, 1974. "Estimation and Inference in Nonlinear Structural Models," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 3, number 4, pages 653-665 National Bureau of Economic Research, Inc.
- Bernd Lucke, 2004. "Real Interest Rates and Productivity Shocks : Why Are Business Cycles Negatively Correlated Between the European Union and Jordan?," Emerging Markets Finance and Trade, M.E. Sharpe, Inc., vol. 40(6), pages 82-94, November.
When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:10/256. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jim Beardow)or (Hassan Zaidi)
If references are entirely missing, you can add them using this form.