Are bank loans important for output growth?

Ulrike Rondorf

Journal of International Financial Markets, Institutions and Money, 2012, vol. 22, issue 1, 103-119

Abstract: This paper investigates whether changes in the volume of supplied bank loans have a significant effect on output growth in the euro area. After the significance of the bank lending channel is established, money demand shocks are used as an instrumental variable for loans, following Driscoll (2004). With the application of a cross-country panel estimation, the impact of a change in loan supply on output growth is tested. In contrast to the United States, there is evidence that fluctuations in loans lead to a response in output in the euro area, supporting the credit view.

Keywords: Bank lending channel; Monetary policy transmission; Credit view; Cross-country analysis; Euro area (search for similar items in EconPapers)
JEL-codes: C23 E44 E51 E52 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (18)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:22:y:2012:i:1:p:103-119

DOI: 10.1016/j.intfin.2011.08.001

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