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Bank credit and economic growth

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  • Leitão, Nuno Carlos

Abstract

This manuscript examines the link between bank lending and economic growth for European Union (EU-27). The period was examined, between 1990 and 2010. We apply a dynamic panel data (GMM-System estimator). This estimator permits the researchers to solve the problems of serial correlation, heteroskedasticity and endogeneity for some explanatory variables .As the results show, savings indeed promotes growth. The inflation has a negative impact on economic growth as previous studies. Our results show that domestic credit discourages the growth.

Suggested Citation

  • Leitão, Nuno Carlos, 2012. "Bank credit and economic growth," MPRA Paper 42664, University Library of Munich, Germany, revised 2012.
  • Handle: RePEc:pra:mprapa:42664
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    More about this item

    Keywords

    Bank credit; economic growth; and panel data;

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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