Economic Uncertainty and Credit Crunch: Evidence from an Emerging Market

Seza Danisog¬lu Rhoades and Z. Nuray Güner

Emerging Markets Finance and Trade, 2003, vol. 39, issue 4, 5-23

Abstract: Using both univariate and multivariate analyses, this paper attempts to determine whether a credit crunch occurred in the Turkish economy during the 1990s. It also addresses the question of whether this credit crunch was a supply-side- or a demand-side-originated phenomenon. Economic uncertainty is proxied by unanticipated inflation. The analyses are carried out by controlling for political uncertainty as well. The results indicate that economic uncertainty has a significantly negative impact on the supply of, and the demand for, loans. Also, there is evidence that a supply-side-originated credit crunch occurred in the Turkish economy.

Keywords: bank loans; credit crunch; economic uncertainty (search for similar items in EconPapers)
Date: 2003
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