Supply and Demand Identification in the Credit Market

Mauricio Calani, Pablo García S. and Daniel Oda
Authors registered in the RePEc Author Service: Pablo Garcia Silva

Working Papers Central Bank of Chile from Central Bank of Chile

Abstract: This paper identifies supply and demand functions in the Chilean credit market. The analysis divides credit into three categories by debtor type, namely consumption, commercial and housing loans. We successfully exploit novel bank-level data on non-price covenants to address the simultaneous equation endogeneity problem in the estimation of interest rate elasticities. Our truly unique panel data set covers the 2003-2009 period and combines information on loan amount allocation, interest rates, balance sheet indicators with information from the “Survey on General Conditions and Standards in the Credit Market”, conducted by the Central Bank of Chile since 2003. Additionally, we characterize the statistical determinants of the survey responses, and later we use our estimation results for understanding the credit contraction episode of the second half of 2008, during the global financial turmoil.

Date: 2010-04
New Economics Papers: this item is included in nep-ban and nep-ure
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:chb:bcchwp:571

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