Bank credit and economic growth

Leitão, Nuno Carlos (2012): Bank credit and economic growth.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Bank credit, economic growth, and panel data
• Subjects: G - Financial Economics > G2 - Financial Institutions and Services; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O16 - Financial Markets ; Saving and Capital Investment ; Corporate Finance and Governance; C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C33 - Panel Data Models ; Spatio-temporal Models

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