SKEWED CREDIT AND GROWTH DYNAMICS

Gemma Estrada, Aitor Erce and Donghyun Park
Additional contact information
Gemma Estrada: Asian Development Bank, Mandaluyong City, Metro Manila, Philippines

The Singapore Economic Review (SER), 2023, vol. 68, issue 02, 563-608

Abstract: While a large empirical literature finds that financial development is beneficial for economic growth, recent evidence suggests otherwise. We contribute to this debate by examining the link between credit growth skewness and long-run growth. Earlier literature found that economies that are characterized by negative skewness in private sector credit growth experience faster output growth. We revisit this relationship using a large panel dataset that encompasses both advanced and developing economies and the aftermath of the global financial crisis. While our results reconfirm an association between credit skewness and economic growth, the relationship is more nuanced than previously thought. The beneficial growth effects of negative skewness are evident only prior to 2000. Our findings help explain why credit cycles positively affected economic growth in emerging markets in the past and why advanced economies’ growth has been sluggish since the 2008–2009 global financial crisis.

Keywords: Credit dynamics; skewness; economic growth (search for similar items in EconPapers)
JEL-codes: F36 G10 O16 O41 (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S0217590822500783
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsi:serxxx:v:68:y:2023:i:02:n:s0217590822500783

Ordering information: This journal article can be ordered from

DOI: 10.1142/S0217590822500783

Access Statistics for this article

The Singapore Economic Review (SER) is currently edited by Euston Quah

More articles in The Singapore Economic Review (SER) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().