Post-crisis credit slowdown in South-East Europe: return to normality?

Branimir Jovanovic, Egzona Hani and Ljupka Georgievska
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Egzona Hani: National Bank of the Republic of Macedonia
Ljupka Georgievska: National Bank of the Republic of Macedonia

Empirica, 2017, vol. 44, issue 4, No 6, 733-780

Abstract: Abstract What explains the post-crisis slowdown in bank credit to private sector in the South-East European economies? We try to answer this question, by comparing the actual credit growth to the fundamental and equilibrium growths. The fundamental growth is defined as the growth justified by the fundamentals, the equilibrium growth—as the growth consistent with the economy being in medium-term equilibrium. Results suggest that the slowdown reflects both return of the credit activity to its fundamental value, and return of the fundamental values to their equilibrium levels, after years of excessiveness during the pre-crisis period. Rapid credit growth, as in the pre-crisis period, should not be expected in the near future.

Keywords: Credit growth; Equilibrium credit; Fundamental credit; South-East Europe (search for similar items in EconPapers)
JEL-codes: E44 E51 G21 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (6)

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Working Paper: Post-Crisis Credit Slowdown in South-East Europe – Return to Normality? (2014)
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DOI: 10.1007/s10663-016-9338-2

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