Demand for private sector loans in the euro area

Renáta Pitoňáková

International Journal of Economic Policy in Emerging Economies, 2018, vol. 11, issue 5, 509-518

Abstract: The current expansionary monetary policy of the European Central Bank stimulates corporates and households to higher investment and consumption. The article investigates determinants of demand for loans of private sector granted by monetary financial institutions of the euro area. The modelling involves monthly data of cost of borrowing and economic indicators (2004 M1-2016 M4). The outcomes suggest that private sector loans are positively related to industrial production index and negatively to real interest rate and producer price index. The knowledge about determinants of loans of private sector is of importance for monitoring and steering economic and monetary policy of the euro area and for households and corporates timing the use of debt finances from the monetary financial institutions.

Keywords: private sector loans; interest rate; industrial production index; IPI producer price index; PPI; cointegration. (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijepee:v:11:y:2018:i:5:p:509-518

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