Exploring the Steady-State Relationship between Credit and GDP for a Small Open Economy - The Case of Ireland

Robert Kelly, Kieran McQuinn and Rebecca Stuart

No 1/RT/11, Research Technical Papers from Central Bank of Ireland

Abstract: The rapid increase in credit in an economy is now commonly perceived to be one of the leading in- dicators of financial instability. This view has been reinforced by the aftermath of the international financial crisis, which commenced in mid-2007. A key policy response has been to focus on the ratio of private sector credit to GDP for an economy, observing, in particular, significant deviations be- tween the actual and long-run trends of the ratio. This paper examines the issue of the steady-state relationship between private sector credit and GDP in the case of Ireland, a country which, even by international standards, experienced a sizeable expansion in credit over the past 10 years.

Keywords: Credit; GDP; Indicator (search for similar items in EconPapers)
JEL-codes: E51 E63 G01 (search for similar items in EconPapers)
Date: 2011-03
New Economics Papers: this item is included in nep-cba and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Related works:
Working Paper: Exploring the steady-state relationship between credit and GDP for a small open economy: the case of Ireland (2013)
Journal Article: Exploring the Steady-State Relationship Between Credit and GDP for a Small Open Economy–The Case Of Ireland (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:cbi:wpaper:1/rt/11

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