What drives credit growth in emerging Asia?

Selim Elekdag and Fei Han

Journal of Asian Economics, 2015, vol. 38, issue C, 1-13

Abstract: This paper seeks to uncover the main drivers of credit growth in emerging Asia using a multi-country structural vector autoregressive (SVAR) model. We propose an innovative identification strategy in a two-block SVAR model whereby shocks within blocks are identified using sign restrictions, whereas shocks across the blocks are identified using a block-recursive structure. We find that domestic factors are more dominant than external factors in terms of driving rapid credit growth in emerging Asia. This is particularly true for domestic monetary policy, which can play a pivotal role in managing rapid credit growth in emerging Asia.

Keywords: Rapid credit growth; Emerging Asia; SVAR; Bayesian estimation; Sign restrictions (search for similar items in EconPapers)
JEL-codes: C32 C50 E51 E52 F41 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (9)

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Working Paper: What Drives Credit Growth in Emerging Asia? (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:asieco:v:38:y:2015:i:c:p:1-13

DOI: 10.1016/j.asieco.2015.03.001

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