Does uncertainty matter for private credit convergence?

Can Xu (), Andreas Steiner () and Jakob Haan ()
Additional contact information
Can Xu: Postdoctoral Research Station at China Merchants Group
Andreas Steiner: University of Groningen
Jakob Haan: University of Groningen

Review of World Economics (Weltwirtschaftliches Archiv), 2025, vol. 161, issue 3, No 7, 1112 pages

Abstract: Abstract This paper investigates the convergence of private credit and examines how uncertainty influences this convergence process. Based on a neoclassical growth model, we show that economic uncertainty affects the speed of convergence of private credit to its steady state. Utilizing data spanning from 1950–2019 and including 159 economies, we present empirical evidence that aggregate private credit and its components, i.e., household and (non-financial) firm credit, relative to GDP or working-age population, converge across economies over time. However, the process of private credit convergence is slowed down significantly by economic uncertainty measured by the uncertainty index proposed by Ahir et al. (2022).

Keywords: Private credit; Convergence; Uncertainty; Global uncertainty (search for similar items in EconPapers)
JEL-codes: E51 G21 G51 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10290-024-00562-4 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:weltar:v:161:y:2025:i:3:d:10.1007_s10290-024-00562-4

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10290/PS2

DOI: 10.1007/s10290-024-00562-4

Access Statistics for this article

Review of World Economics (Weltwirtschaftliches Archiv) is currently edited by Paul Bergin, Holger Görg, Cédric Tille and Gerald Willmann

More articles in Review of World Economics (Weltwirtschaftliches Archiv) from Springer, Institut für Weltwirtschaft (Kiel Institute for the World Economy) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().