 Modelling the demand for loans to the private sector in the euro areaA. Calza, C. Gartner and João Sousa (joao.sousa@ecb.int) Applied Economics, 2003, vol. 35, issue 1, 107-117 Abstract: This article studies the determinants of loans to the private sector in the euro area. Using the Johansen methodology, the study identifies one cointegrating relationship linking real loans, GDP and interest rates. This relationship implies that in the long-run real loans are positively related to real GDP and negatively to real short-term and long-term interest rates. Both the signs and the magnitude of the coefficients suggest that the cointegrating vector describes a long-run demand equation. The short-run dynamics of the demand for euro area real loans is subsequently modelled by means of a Vector Error Correction Model (VECM). A number of specification tests performed on the VECM produce satisfactory results, with tests of stability of the model parameters showing no signs of structural breaks during the sample period (1980: 1-1999: 2). All of this suggests that developments in real loans to the private sector in the euro area can be reasonably explained by the model. Date: 2003 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:applec:v:35:y:2003:i:1:p:107-117 Ordering information: This journal article can be ordered from DOI: 10.1080/00036840210161837 Access Statistics for this article Applied Economics is currently edited by Anita Phillips More articles in Applied Economics from Taylor & Francis Journals |
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